Willow Paper Company engaged you to review its internal control structure. Willow does not prelist cash receipts before they are recorded, and it has other deficiencies in processing collections of trade receivables, the company's largest asset. In discussing the matter with the controller, you find the controller is chiefly interested in economy when assigning duties to the 15 office personnel. The controller feels the main considerations are that the work should be done by people who are most familiar with it, capable of doing it, and available when it has to be done. The controller claims excellent control over trade receivables because receivables are pledged as security for a continually renewable bank loan and the bank sends out positive confirmation requests occasionally, based on a list of pledged receivables furnished by the company each week. You learn that the bank's internal auditor is satisfied if he gets an acceptable response on 70 percent of his requests. 

1. Explain how prelisting of cash receipts strengthens internal control over cash. 

2. Assume that an employee handles cash receipts from trade customers before they are recorded. List the duties which that employee should not do to withhold from him the opportunity to conceal embezzlement of cash receipts.