Reference no: EM132737932

Yorkshire Bike Shop has a liberal return policy. A customer can return any product for a full refund within 14 days of purchase. When a customer returns merchandise, Yorkshire policy specifies the following:

1. Store clerk issues a prenumbered return slip, refunds cash from the cash register, and keeps a copy of the return slip for review by the manager.
2. Store clerk places the returned goods back on the shelf or on the floor as soon as possible.Yorkshire uses a periodic inventory system.

Required

Problem 1: How can a dishonest store clerk steal from Yorkshire? What part of company policy enables the store clerk to steal without getting caught?

Problem 2: How can Yorkshire improve its internal controls to prevent this theft?