Kitchen Best Case Study

916 Words4 Pages
Introduction After observing operations at Kitchen Best (hereafter “the firm”), we, Deloitte Touche Tohmatsu, have the following findings. Inherent problems exist within her operations and some of them steps on the boundaries of the Law. In this report, problems would be explained and a recommendation would be provided. Summary Nepotism, bribery and embezzlement and unsystematic management are problems that we have discovered, these could be blamed towards the lack of formal supervision and guidelines. Focusing on internal controls and management transformation may help ensure the firm’s operational integrity. The firm is recommended to execute new rules and policies, report criminal offences to authorities and reform management practices.…show more content…
Non-existent guidelines on entertainment expenses used to maintain customer relationships, poor enforcement on quality control procedures and lack of formal vetting procedures on contractors. For instance, Operations Director spending huge amounts entertaining customers and even embezzled funds for his personal gain; in the Shago case, faulty products were discovered through in-house testing but no remedial actions were taken to resolve the matter; failure to supervise external testing agency, Keemark Testing Services, led to bribery and inaccurate lab testing results, in the end, products made were of poor quality and could not comply with customer’s (Haus de Metro) standards; contracts were awarded due to “Guan Xi” but not by formally assessing the merits and demerits of factories, as happened in the Shago case. These all show the poor management within the firm. The lack of rules and policies gave senior managements chances to take advantage of their position at the firm. In the long run, the firm may lose business and her sustainability would be in…show more content…
The lack of rules and guidelines on “Entertainment Expenses” is believed to be the cause. The firm should draw up guidelines for these expenses: how much to spend, where to spend and reimbursement procedures. We recommend the firm to set a maximum of HKD$1,500 for every client(s) or vendor(s) meeting, if the occasion shall surpass the maximum sanctioned value, staff can either pay by themselves or apply for special approval from the Chief Executive. The locations of these meetings should also be in an appropriate setting, for instance restaurants or private clubs, staff should avoid going to nightclubs or karaoke unless approval has been granted. Official receipts from the meeting venue stating the number of attendees and what has been ordered shall be the only valid document for reimbursement. The accountant shall have the right to question or reject

More about Kitchen Best Case Study

Open Document