Question 2 (28 marks)
Mary Cooper owns five convenience stores that sell food, beverages, and gasoline. The stores are open 24 hours a day, 7 days a week. The business has 20 employees who do not always work at the same store; rather, they are assigned to stores on a rotating basis. Two employees work the day shift but only one works the night shift from 10:00 p.m. to 7:00 a.m. Ms. Cooper manages the company’s overall operations from head office. Customer satisfaction has always been important to Mary and she visits each store at least once a week and spends several hours serving customers and working alongside her employees. This gives her the opportunity to evaluate customer satisfaction and assess the quality of service provided by the employees.
Recently, Mary has noticed an increase in the number of credit card transactions declined by the bank. An analysis of the reasons given by the card issuers showed that several cases occurred after the customers had disputed the transactions. Mary has asked you, in your capacity as an internal auditing expert, to analyze the situation and inform her of your findings.
Here is a description of sales for each of Ms. Cooper’s stores: 1. All sales are recognized on a cash basis, and the company accepts major credit cards and debit cards. 2. Each store has its own cash register which records all transactions. The files are uploaded once a week to the central system server located at the company’s head office. 3. At the head office sales data from each store are consolidated, and the files are then archived and permanently stored. 4. At the end of each month, the bank sends an electronic statement of all credit card and debit card transactions. This file contains a summary of transactions and a detailed list of transactions that were declined and the reasons they were declined.
You have asked your assistant to