Description

Sam Hill has just installed a new computerized accounting system at his business to process all sales, and cash collections from customers, and maintain all accounts receivable records. Jeremy is the only staff member with computer expertise; therefore he records all transactions in the new computerized accounting system. To enable the business to operate more efficiently, all cash payments by customers are made directly to Jeremy, and all mail containing cheque payments by customers are opened by Jeremy. Jeremy immediately records the payments in the new computerized accounting system, which automatically generates a receipt for the customer. During the day Jeremy puts the cash and cheques received in the unlocked bottom drawer of his desk, and the next morning he deposits them at the bank. REQUIRED: Identify the internal control weaknesses in the above situation and discuss the consequences. (Word limit: 180 – 230 words)