II.

Internal Control Deficiencies

It is a given fact that William, the assistant manager, gets a hold of the unsold
tickets , the locked box which contains the second half of each sold ticket, and the
sales revenue at the end of the last show. William also is the only one in charged
with depositing the cash in the bank, preparing bank reconciliation statements and
weekly sales report. Evidently, there is a lack of segregation of duties. This is a
problem because having only one man handling tasks such as these increases the
risk of fraud and theft. It makes it easier for William to steal and just manipulate or
conceal data and information from bank reconciliation statements given the fact that
he he keeps the bank receipts in a an office safe which only he has access to.
William also volunteered to help Jodi on crowded days which means that having only
one ticket seller is a problem.

The fact that Craig manages all 25 theaters which are widely spread in a
geographic area also shows another lack of segregation of duties which could cause
an insufficient, if not improper, supervision on each theater’s Assistant Managers.
Improper or insufficient supervision, which is another indicative of a poor internal
control, could also be the reason for William to easily steal from the company assets
or commit fraud without being noticed.

It is also a given fact that Craig has not noticed Maria’s suspicions and also has
not objected to any of William’s practice.The Manager and the Assistant Manager
being distant relatives is also possible factor that could increase the risk of a possible
collusion among them or perhaps William abusing Craig’s trust.