Internal Control and Home Improvement Essay

Lowes Home Improvement is a chain of retail interior(a) improvement based in the United States. It was tacked in 1946 in marriage Wilkesboro, North Carolina. Lowes Home Improvement has expanded internation every last(predicate)y into Mexico, Canada, and voice venture with Woolworths Limited in Australia. Lowes Home Improvement class-conscious 54 in Fortune 500 for 2012, decreasing four muscae volitantes in 2011 (Cnn m superstary, 2012). Lowes Home Improvement is the second macroscopicst retail property improvement chain, behind The Home Depot. There ar 1,724 Lowes descents passim United States, Canada, Mexico operating with more than 234,000 employees (Lowes home improvement, 2012).S effectholders are case-by-cases, groups, or organizations that project a stake in the business. Stakeholders are categorize into 2 types internecine or foreign. Internal stakeholders fuck be owners, managers, and employees. External stakeholders trick be suppliers, lenders, and customer s (Worthington, 2009). Human Resource ( arctic device)There are m any pencil eraser rules in Lowes Home Improvement. We strive to sustain a pencil eraser culture that integrates safety into all parts of our business. Safety is a tenderness value of our company. We hold our leadership teams accountable for creating and maintaining a safe milieu to bleed and shop. Safety practices are incorporated into each job task, and we trust make watering is critical to ensuring safety awareness and knowledge are well-kept at the highest level (Focusing on safety, 2012, p. 1).When I was the department passenger vehicle of Product Service, I was in arouse of 70 percent of all resets in the interpose including display changes, merchandising refresh, and general product rotation. As an internal stakeholder (manager), I knew all the rules. However, some of these rules prevented me from accomplishing my job. Some clips resets require me to farm inside the bay to maneuver the products, be ams, or shelves. This is strictly against Lowes policy, which states I should bulge an order picker (machine to hold me up). I understand the contract for the rules, notwithstanding sometimes they cannot be followed exactly (prior thoughts as a Department Manager). If I were to get hurt while doing, Lowes is liable for my injuries or death. Even though it clearly states it in our policy not to do these actions, it could not be proven that I was properly trained or ever informed about it. This is why it is important for all incidents to be reported. As an Assistant inclose Manager, I must constantly four-in-hand and train my associates and document (validate). I must ensure every s baksheeshping point my employees makes is what is best for the business.Employee incidents are known as workers comp claims that directly profess net profitable. When the store reports the incident to our claims department, we are automatically deducted profits to pay for the expense. This can ram ble from $10,000 to whatever. . Just recently, we had to pay for knee surgery for our outside sales representatives. Unfortunately, these claims can take many years to close, because the individual can continue to get treatment even after surgery. Typically, workers comp will attempt to pay the individual out before paying for surgery. If the individual accepts the buyout, they will lose their job.An external stakeholder is the customers that come in the building. Lowes is just as liable for any injuries or damages caused to a customer as an employee is. Every first light an Assistant Store Manager must walk the Daily Safety Review (DSR) to verify the store is clean, clear, and safe. We must verify that all top stock, product, safety procedures, locks, and safety chains are up and operational. Recently, someone did not properly send off a stack of trashcans in top stock. The trashcans were not standing on the tops and fell around 1130am, fortunately no customers or employees were hit with ten trashcans as they fell. node incidents are known as general liability claims that directly affect profitable. When the store reports the incident to our claims department, we are automatically deducted profits to pay for the expense. This can be given from $2500 to $25,000. Anything over $25,000 is distributed among the rest of the district. To make up $2500 in pure profit is to sell roughly $6,000 when you calculate employee salary, utilities, and facility cost. Marketing ( unreal Advertising)The Federal trade Commission (FTC) oversees any unreal claims of products or services. Recently, the FTC won a $40 million settlement against Sketchers toning shoes and apparel. Sketchers falsely represented clinic studies claiming their Shape-Ups, Toners, Tone-Ups, and Resistance Runners would attention people lose weight, and tone and strengthen their butts, legs, and abdominal muscles. The most cheapjack ad was used during Super Bowl featuring Kim Kardashian firing her p ersonal training for a pair of Shape-Ups. Sketchers truly believed they would win the multiple righteousnesssuits in contrastive states, but choose to settle out for the ease of the company and individuals (Bachman, 2012).Deceptive ad can negatively affect internal and external stakeholders. Customer service is the most important aspect of any business. Deceptive publicize can constrain a negative experience for customers, which directly affect employees. A bad customer service experience can dramatically cost any business thousands of dollars. The internet is the playground for anyone. This can create a bad reputation when individuals post on their Facebook, Twitter, or say social media sites. If a business loses its customers base, it cannot support its employees.Recently, at my Lowes Store we had the state department conducting an internal study on pricing. The last time this audit was done was in 2004. The audit required scanning 50 products and verifying the correct pri ce is labeled. If the price was incorrect, this would be considered false advertisement or deceptive advertisement and Lowes would be fine thousands of dollars. Fortunately, we passed the audit with no issues. Accounting (Unethical Practices)Accounting fraud will continue to fleet if there is opportunity. There must be pro views that prevent opportunity. Olympus sight covered up $1.7 billion in accounting fraud. The three executives hyperbolic companys net worth for five years. Three executives pleaded indictable to covering up and firing the chief executive who originally found the discrepancy. This is one of the largest corporate scandals in Japan. The United States put in place corporate governance reform after the Enron scandal. These unethical behaviors can consequence in lawsuits from shareholders. After the Enron scandal, Senator Paul Sarbanes and Representative Michael Oxley (Sarbanes-Oxley Act of 2002) pushed a law through that changed regulation of financial practices and governance of corporations.Internal stakeholders have large investments into their company. First, it is their livelihood. Second, they could own company stock. Lastly, if the corporation goes under what value does that company tag on to the individuals resume? Employees of large corporation rarely see their importance in the big picture of things. The employees build companies. No matter how low your topographic point is you can directly affect the business positively or negatively. As managers it is my job to ensure that my employees are align with the companys vision and mission.External stakeholders can in addition be affected by unethical accounting practices. The most obvious example would be if the customer were also a stakeholder in shares. This can directly affect the value of the stock. another(prenominal) example would be customers affected in beautiful towns. For example, if in their small town there is no other hardware store but Lowes Home Improvement. What wo uld happen if that Lowes store closed, where would citizens of the town go to get their supplies? How much farther would they have to travel? This creates a capacious inconvenience and provides opportunity for other small convenience/gas stores charge more for product.ConclusionAwareness is the number one preventer in safety issues. Companies must develop incentives for employees to remain and operate safely. At Lowes if, a store goes 60 days contingency free, there is a cook out that is hosted by the store. One time at my store, we went 265 days accident free, we held the highest accident free days in the division. Companies must develop and set ahead these incentives for employees to remain safe. This includes knowing when to get help and when to do it yourself. The saying work smarter not harder must be in every employees forefront.Deceptive publicise is typically dealt with at corporate levels in retail. However, these corporations typically do not deal with the problem. The store level associates deal with the deception. At Lowes, we are told to take care of the customer. Depending on the situation, as managers we may be able to moderation items to appease the customer. I believe there should be a separate department that evaluates all marketing and advertisements. This may save the company millions of dollars from lawsuits of deceptive advertisements.Companies that violate these ethics share common fractions. Three common elements change individuals to violate ethical or criminal misconduct in a corporation. 1. The availability of an opportunity2. The existence of some form of storm leaders to an incentive 3. The capacity to rationalize.These three elements are arranged in a pyramid. Opportunity is the top of the pyramid. Opportunity is at the top because without opportunity secret code would exist. To reduce or eliminate opportunity, companies must implement effective internal controls. These can include policies and procedures, audits, and de partments who oversee (checks and balances). The best example of these internal procedures is a bank securing its money in a safe. These are designed to apply unwanted people out. Pressure is located at the bottom left-hand(a) corner. Pressure can come from managers using intimidation, family expectations (standard of living), personal vices, and poor decision-making.For example, a manager may use intimidation and say, You will be fired if you do not achieve your sales numbers. This type of pressure can cause certain employees to go too far. The last element is rationalization located at the bottom right corner. The individuals we are talk of the town about do not think they are evil quite an they justify their own misconduct. Some rationalization would be everyone does it, I merit this, I am only borrowing the money, and the company can yield it. Unfortunately, there will be individuals who cross the ethical line. It takes the personal uprightness of an individual to resist the opportunity. The best indicator of these individuals is there past performances ( sound managerial accounting, 2006).To fix these issues requires appropriate checks and balances. Corporations must ensure they have policies and procedures to prevent such opportunities from existing. In addition, these policies must be validated consistently and frequently.ReferencesBachman, K. (2012, whitethorn 16). Sketchers settle deceptive ad case with FTC for $40m. Retrieved from http//www.adweek.com/news/advertising-branding/skechers-ad-case-ftc-40m-140577 CNN money. (2012, May 21). Retrieved from http//money.cnn.com/magazines/fortune/fortune500/2012/snapshots/2686.html Edmonds, T., Tsay, B., & Olds, P. (2006). Fundamental managerial accounting concepts. Retrieved from http//highered.mcgraw-hill.com/sites/0073526797/student_view0/ebook/chapter1/chbody1/ethical_consideration s.html Focusing on safety. (2012). Retrieved from http//www.lowes.com/cd_Focusing on Safety_323526845_ Lowes Home Impro vement. (2012). Retrieved from http//www.lowescreativeideas.com/social/our-vision-and-values.html Slodkowski, A. (2012, September 25). Japanese camera and medical examination equipment maker Olympus Corporation and three of its former executives pleaded guilty on Tuesday over charges related to a $1.7 billion accounting cover-up in one of Japans biggest corporate scandals. Retrieved from http//www.reuters.com/ hold/2012/09/25/us-olympus-trial-idUSBRE88O01920120925 Worthington, I. (2009, February 09). Improvement and innovation. Retrieved from http//www.improvementandinnovation.com/features/article/stakeholders-and-how-they-affect-your-business/