Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Exercise 19

The Arcade Co. of Orlando, Florida, has established a new division that will manage a chain of video-game arcades in 40 locations throughout several southern states. The locations will be divided into 2 regions, each under a regional manager. Each location will be assigned a local manager. As many as 60 machines will be available at certain locations, although the average at each location will be 35 machines.
Management intends to minimize the number of operating and accounting employees to reduce costs. However, it plans to hire sufficient maintenance personnel to minimize downtime of machines. The local manager will be required to collect the coins from the machines and deposit them in a local bank. Access to the game counter and coins in each machine will be by means of a master key. Validated deposit slips are to be mailed to the corporate office by the local manager. Bank statements are to be mailed by the bank directly to the corporate office.
Required:
Identify the specific risks that are inherent in the operations of the new division and the risk responses for each of those risks (avoid, reduce, share, or accept).