The Art Appreciation Society operates a museum for the benefit and enjoyment of
ID: 2500032 • Letter: T
Question
The Art Appreciation Society operates a museum for the benefit and enjoyment of the community. During hours when the museum is open to the public, two clerks who are positioned at the entrance collect a $5 admission fee from each nonmember patron. Members of the Art Appreciation Society are permitted to enter free of charge upon presentation of their membership cards. At the end of each day, one of the clerks delivers the proceeds to the treasurer. The treasurer counts the cash in the presence of the clerk and places it in a safe. Each Friday afternoon the treasurer and one of the clerks deliver all cash held in the safe to the bank and receive an authenticated deposit slip that provides the basis for the weekly entry into the cash receipts journal. The board of directors of the Art Appreciation Society has identified a need to improve its internal control over cash admission fees. The board has determined that the cost of installing turnstiles, sales booths, or otherwise altering the physical layout of the museum will greatly exceed any benefits which may be derived. However, the board has agreed that the sale of admission tickets must be an integral part of its improvement efforts. Mary Smith, the internal auditor, has been asked by the board of directors of the Art Appreciation Society to review the internal control over cash admission fees. Required: Indicate one weakness in the existing internal control over cash admission fees that Smith should identify, and recommend one improvement for each of the weaknesses identified. As an example, I will start the ball rolling. Weakness: There is no documentation to establish the number of paying patrons. Recommendation: Prenumbered admission tickets should be issued upon payment of the admission fee. There are many possible weaknesses and recommendations, but please just identify one so that your peers can also contribute to this scenario.
Explanation / Answer
Weakness:No registers for members and patrons maintained and the receipt of cash is not entered on on daily basis. while depositing this cash in bank there should be some other person than clerk with the treasured to deposit the cash.
Recommendation: There should be a seprate register maintained for memebers and patrons and it should mention date, name, time,membership no. and signature for member register and date, name, time,amount. and signature. At the nnd of the day the ntries should be made in the cash register which should be surprised checked by the management so that the clerk does not have a chance to do a fraud.And a person other than clerk should go with thr treasurer to deposit the cash in the bank.
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