II.

Internal Control Deficiencies

The primary Deficiencies of case is in which the management of Maymai Cinema Franchise didn’t notice
that the assistant manager has not performing his assigned functions correctly thus he performed all the
functions in the management to prevent or detect misstatements on a timely bases. Though he
performed the other function without the authority or competence to perform the control effectively.

The secondary deficiencies is there is limited monitoring employee compliance. No supervision from
higher level management. In which the manager didn’t notice the fraud practices of the assistant
manager.

III. Recommendation

The deficiencies of the case shows the common deficiencies in a business most cases is lack of control
with authorization of transactions and no oversight and review of the monthly revenues, expenditures
and inventory reports.

As what I understand and read the case I recommend internal control measures that I think that could
help the company and the stuff accountant to prevent fraud practices of the assistant manager.
According to Accounting Tools the company should provide:

1. Segregation of duties is sufficient, especially due to the limitation of resources at the company
2. Suitable authorization and approval procedures can be a good help of protecting assets.
3. Check the bank receipts and unsold tickets
4.