Identify the stakeholders in this case. and answer the question
Brady Dumais owns a small restaurant that operates on a cash-only basis; no credit cards are accepted. Brady has taken both a bookkeeping course and a tax preparation course. With the help of his spouse, he is able to perform all the bookkeeping duties himself and prepare his tax returns.
Brady discovers federal and state income taxes take away 35 percent of his profits. Since this is a cash business, Brady has started the practice of “skimming” sales. “Skimming” is the theft of cash from a business prior to its entry into the accounting system of a company. Since some of these cash sales are being taken prior to be recorded they will not appear in the business records. Therefore, these cash sales will escape taxation and Brady will be able to retain 100 percent of these revenue dollars.
Required:
Identify the stakeholders in this case. Please note: When identifying stakeholders (in addition to Brady himself being a stakeholder) please be sure to identify other stakeholders.
Comment on the legal and ethical issues involved in “skimming”.
If you were aware of this activity within your business how would you address it?
Sample Solution
