Internal Control Evaluation of a Restaurant: A Teaching Case

This case provides you with an opportunity to gain an understanding of internal control in a practical setting—a restaurant. The case requires you to (1) obtain a restaurant as a client, (2) develop an understanding of the restaurant's processes for recording sales, (3) identify internal control strengths and weaknesses, and (4) explain the importance of each weakness and state how it may be eliminated. In addition, Version A of the case requires you to prepare a flowchart and write an internal control narrative, while Version B requires you to identify tests of controls. Restaurants must follow procedures to ensure that sales are recorded for all food served; otherwise, the food may be given away. Students must arrange to meet with a manager to inquire about the restaurant's internal control procedures in much the same way an auditor must meet with the management of a client.