Nordhaus Energy Co. makes all sales on credit. Cash receipts arrive by mail, usually within 30 days of the sale. Dan Webster opens envelopes and separates the checks from the accompanying remittance advices. Webster forwards the checks to another employee, who makes the daily bank deposit but has no access to the accounting records. Webster sends the remittance advices, which show the amount of cash received, to the accounting department for entry in the accounts receivable. Webster's only other duty is to grant allowances to customers. (An allowance decreases the amount that the customer must pay.) When Webster receives a customer check for less than the full amount of the invoice, he records the allowance in the accounting records and forwards the document to the accounting department.
Required
You are a new employee of Nordhaus Energy Co. Write a memo to the company president identifying the internal control weakness in this situation. Explain how to correct the weakness.