Gilead Construction Inc., which is headquartered in Calgary, Alberta, built a small apartment building in Red Deer. The construction foreman, whose name was Jon Machenko, moved to Red Deer in May to hire the 20 workers needed to complete the project. Machenko hired the construction workers, had them fill out the necessary tax forms, and sent the employment documents to the home office, which opened a payroll file for each employee.

Work on the building began on June 1. Each Friday evening, Jon Machenko filled out a time card that listed the hours worked for each employee during the five-day work week ended at 5:00 p.m. on Friday. Machenko faxed the time sheets to the home office, which prepared the payroll cheques on Monday morning. Machenko drove to the home office after lunch on Monday, picked up the payroll cheques, and returned to the construction site. At 5:00 p.m. on Monday, Machenko distributed the payroll cheques to the workers.

a. Describe in detail the internal control weakness in this situation. Specify what negative result could occur because of the internal control weakness.

b. Describe what you would do to correct the internal control weakness.