Who are the stakeholders in this situation

Assignment Help Accounting Basics

Reference no: EM132728088

Question - Kim Uy owns and manages KY Restaurant, a 24-hour restaurant near the University of Busay. Kim employs 9 full-time employees and 16 part-time employees. He pays all of the full-time employees by check, the amount of which is determined by Kim's accountant, Lo Gaw. Kim pays all of his part-time employees in currency. He computes their wages and withdraws the cash directly from his cash register.

Mr. Gaw has repeatedly urged Kim to pay all employees by check. But as Kim has told his competitor and friend, Mr. Ed Con, who owns the Tapsilog, "First of all, my part-time employees prefer the currency over a check, and secondly, I don't withhold or pay any taxes and other regulatory contributions on those wages because they go totally unrecorded and unnoticed."

Required -

1. Who are the stakeholders in this situation?

2. What are the legal and ethical considerations regarding Kim's handling of his payroll?

3. Mr. Gaw is aware of Kim's payment of the part-time payroll in currency. What are his ethical responsibilities in this case?

4. What internal control principles are violated in this payroll process?

Assuming the KY Restaurant withholds taxes and deducts the employees' share of SSS, Philhealth and Pag-IBIG contributions from the employees' payroll, but fails to remit the same to respective government agencies, will your answers change? Explain briefly.

Reference no: EM132728088

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