Case 2. This case is based on an actual situation. A-1 Construction Company, headquar- tered in Terre Haute, Indiana, built a Rest Easy Motel 35 miles east of Terre Haute. The construction loreman, whose name was Monty, hired the 40 workers needed to complete the project. Monty had the construction workers 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 motel began on April 1 and ended September 1. Each week, Monty filled out a time card of the hours worked by each employee during the week. Monty faxed the time sheets to the home office, which prepared the payroll checks on Friday morning. Monty drove to the home office after lunch on Friday, picked up the payroll checks, and returned to the construction site. At 5 PM. on Friday, Monty distributed the payroll checks to the workers.

a. Describe in detail the main internal control weakness in this situation. Specify what neg- ative results could occur because of the internal control weakness.

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