Compare The Value Of A Variable With Previous Variable From A Function ,reset The Counter When Val Changes

I am in the middle of taking course 2073B €“ Programming a Microsoft SQL Server 2000 Database. I noticed that in Module9: Implementing User-Defined Functions exercise 2, page 25; step 2 is not returning the correct answer.

Select employeeid,name,title,mgremployeeid from dbo.fn_findreports(2)

It returns manager id for both 2 and 5 and I think it should just return the results only for manager id 2. The query results for step 1 is correct but not for step 2.

Somewhere in the code I think it should compare the inemployeeid with the previous inemployeeid, and then add a counter. If the two inemployeeid are not the same then reset the counter. Then maybe add an if statement or a case statement. Can you help with the logic? Thanks!

Here is the code of the function in the book:

/*
** fn_FindReports.sql
**
** This multi-statement table-valued user-defined
** function takes an EmplyeeID number as its parameter
** and provides information about all employees who
** report to that person.
*/
USE ClassNorthwind
GO
/*
** As a multi-statement table-valued user-defined
** function it starts with the function name,
** input parameter definition and defines the output
** table.
*/
CREATE FUNCTION fn_FindReports (@InEmployeeID char(5))
RETURNS @reports TABLE
(EmployeeID char(5) PRIMARY KEY,
Name nvarchar(40) NOT NULL,
Title nvarchar(30),
MgrEmployeeID int,
processed tinyint default 0)
-- Returns a result set that lists all the employees who
-- report to a given employee directly or indirectly
AS
BEGIN
DECLARE @RowsAdded int
-- Initialize @reports with direct reports of the given employee
INSERT @reports
SELECT EmployeeID, Name = FirstName + ' ' + LastName, Title, ReportsTo, 0
FROM EMPLOYEES
WHERE ReportsTo = @InEmployeeID
SET @RowsAdded = @@rowcount
-- While new employees were added in the previous iteration
WHILE @RowsAdded > 0
BEGIN
-- Mark all employee records whose direct reports are going to be
-- found in this iteration
UPDATE @reports
SET processed = 1
WHERE processed = 0

-- Insert employees who report to employees marked 1
INSERT @reports
SELECT e.EmployeeID, Name = FirstName + ' ' + LastName , e.Title, e.ReportsTo, 0
FROM employees e, @reports r
WHERE e.ReportsTo = r.EmployeeID
AND r.processed = 1
SET @RowsAdded = @@rowcount
-- Mark all employee records whose direct reports have been
-- found in this iteration
UPDATE @reports
SET processed = 2
WHERE processed = 1
END
RETURN -- Provides the value of @reports as the result
END
GO