An Employee Devises a Payroll Scheme That Costs the Employer

question 243

Essay

An employee devises a payroll scheme that costs the employer $150. The employer discovers the fraud but decides not to confront the employee since the amount of the fraud is small. Discuss why this course of action is not advisable.

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Definitions:

EPS

Earnings per share, a key indicator of a company's profitability, calculated as the company's net profit divided by the number of its outstanding shares.

DFL

Degree of Financial Leverage; a measure that shows how much a company's earnings per share (EPS) are affected by changes in its operating income, indicating the volatility of earnings.

Dividends Per Share

The amount of dividends paid to shareholders, divided by the number of outstanding shares of a company's stock.

Stock Price

The present rate at which a company's stock is bought and sold on the stock exchange.