Robatelli's Pizzeria Case StudyIntroduction
On the morning of October 31st, Elaine Black, Chief InformationOfficer at Robatelli's Pizzeria, was waiting for both Jim Saxton,database administrator, and Peter Greyton, operations manager, tocome to her office for a meeting. While waiting, Elaine wasthinking about the surge of telephone and Internet orders expectedto be received through the company's customer order center withinthe next 12 hours. Halloween had always been the most popular dayof the year for people in the greater Pittsburgh area to orderpizza from Robatelli's. There were 53 restaurant locations to servethese customers, but only one location to receive all of the ordersand forward them to the right restaurant. Elaine's thoughts wereinterrupted as Jim and Peter entered her office. The followingconversation took place: ELAINE Well, guys, it's here again, ourbiggest day of the year. Not only is Halloween a busy day, but wehave the upcoming day after Thanksgiving, the week beforeChristmas, and Super Bowl Sunday. Can our current computer system'sinfrastructure and people keep pace with the orders we expect? JIMI think our systems are all running at peak performance. Weshouldn't have any computer concerns for today or those other busydays. PETER Everyone in the customer order center is focused onmaking sure that our customers get their pizzas as ordered. We haveplenty of people scheduled to work tonight, so we're good to go.ELAINE Terrific. But every time we face one of these peak salesdays, I start wondering about the long-term capacity andeffectiveness of our computer systems. Jim, we need to think longterm about our computer system. I was just reading an article thatI'd like you to take a look at. It's about Anheuser-Busch Companiesand their use of data mining. JIM I do agree with you, Elaine; weshould always be thinking about how newer IT systems can help us.Could you e-mail me the link to the article? ELAINE Sure, and Iwould like you to think about how we might use the same approach inour business. Peter, your order center people are doing a greatjob, but again there's something I'd like us to think about in thelong run. As you know, we now have to manually enter all customerorder center sales and store sales into our general ledger (GL). Ithink we could improve a lot of things if those sales areautomatically fed into our GL software. Why don't you think aboutany advantages you see for an automatic interface, and we'll lookat the costs compared to those advantages. How's that sound? PETERI'll do that. I'll give it some thought and work on a report aboutan automatic interface between our GL software and the point ofsale systems in our restaurants as well as the phone and Internetsales. How soon do you want to meet again to look at these issues?ELAINE Let's say, in two weeks at the same time. As Jim and Peterleft her office, Elaine continued to think about the features ofthe company's accounting information systems and whether or notdata extracted from these systems could facilitate the multipleneeds of the company. The focus had always been on providingaccurate financial accounting information from the variouslocations; however, the company's aggressive growth strategiesmeant increased emphasis on the system's ability to analyzedetailed customer information that could be translated intoincreased sales opportunities. Elaine knew the challenges theyfaced could very well affect the company's ability to maintain itscompetitive advantage. She realized that her department mustcontinually improve the company's information systems to help itachieve growth strategies. Operating state-of-the-art systems wasimperative to position the company to execute those growth plans.However, she was concerned about the possibility that restrictionsof the current information systems could actually prevent thecompany from doing what it wanted to do. Allowing restrictivesystems to prevent them from achieving business strategies was arisk that Elaine would not tolerate! Background Robatelli'sPizzeria is a great American success story. Started by DinoRobatelli in the 1960s, the business impetus was a family pizzarecipe. Introduced to the public at a church festival inPittsburgh's Little Italy, Robatelli's pizzas are now a recognizedtradition in the Greater Pittsburgh area. A full menu and localexpansion have led to its growing popularity over the years andhave helped it achieve nearly 50 percent of the area market share.Annual sales now exceed $100 million. Following is a timeline ofmilestones in the company's history: 1962 Dino and Gloria Robatellicontributed $500 and the family pizza recipe to a partnership thatopened the first Robatelli's Pizzeria. 1965 The Robatellis boughtout their business partners. 1967 The first Robatelli's franchiseopened. 1971–77 Dozens of new Robatelli's franchises openedthroughout the surrounding region. 1983 Home delivery servicebegan. 1992 A central, one-number calling system for allrestaurants was launched. 2003 Internet ordering began. The first“prototype pizzeria” opened. Today A total of 53 locations are inoperation.
Review the Robatelli's Pizzeria Case Study. Considering thenature of the relationship between Robatelli's Pizzeria home officeand its franchise owners, the company may be quite vulnerable totheft or fraudulent financial reporting committed by thesefranchise owners. I
n 700 to 1,050 words, discuss the following: Describe threecomponents of the fraud triangle and how each would relate to afranchise owner's likelihood to defraud Robatelli's Pizzeria.Identify three types of fraud to which Robatelli's Pizzeria may besusceptible.
Indicate whether the fraud is classified as management fraud,employee fraud, vendor fraud, customer fraud, or computer fraud foreach.
Suggest an internal control that could be implemented to preventor detect the potential fraud for each. Design a 5- to 6-bulleteditem code of ethics for Robatelli's Pizzeria. You may find guidanceby searching the Internet for examples.
