Discuss the controls Wambui needs to put in place to manage more effectively both production and the trainer functions.

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter6: Cash And Internal Control
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Problem 6.5AMCP
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CASE DISCUSSION

Wambui had been managing the budget department for Faida Bank. Because the work experience gained here was useful, much of the budget analysis work done in the department was performed by a group of management trainees. The trainees tended to be recent college graduates who were ambitious; they expected the budget work experience to be the pathway into the prestigious auditing department.

Wambui managed under the assumption that by maintaining an open-door policy her employees would bring any problems to her attention. As a result, she remained in her office and seldom met with the trainees. Instead she would peruse the budget reports they submitted and return them to her secretary without comment.

The reports often bore numerous errors which the trainees would be expected to make but which Wambui’s quick persual of the documents did not catch. The department heads throughout Faida Bank who received the erroneous reports would complain directly to the trainee who prepared the reports. Overtime relations between the department heads and the trainees deteriorated.

The trainees who worked the same office area, easily shared their frustrations about the work and Wambui. These ‘bitch’ sessions became more commonplace and openly contemptuous of Wambui. Once these ‘bitch’ sessions became common practice, the situation became adversarial: Us (trainees) Vs them (Wambui). And since she made no effort to hear them, they made no effort to speak. Likewise, the dissatisfaction with Wambui’s department spread amongst managers.

The pressure of poor budget work and disgruntled employees continued to rise to a point Wambui’s boss talked to her one day, demanding to know what had gone wrong. Wambui, shaken by the news and unable to answer the questions wondered what she should do.

 

Discuss the controls Wambui needs to put in place to manage more effectively both production and the trainer functions.                                                                        

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