The local county fair has provided enjoyment for area residents for many years. In recent years, attendance at the nine-day fair has increased, and the fair officials recognize the need to improve the controls over cash receipts. They asked you to observe the collection of admission fees at the main entrance to the fairgrounds, investigate how cash receipts are recorded, and recommend improvements that can be implemented next year. The facts you obtained form performing these procedures are documented in the following paragraphs.

Two employees were positioned at the main entrance to collect the admission fees ($10 for adults and $5 for senior citizens and children under 12; parking was free) as two streams of cars entered the fairgrounds. Each pair of employees worked a three-hour shift each day. At the end of each shift, the employees who had worked that shift transferred the cash collected to the next shift’s employees as those employees arrived at the main entrance.

When the main entrance closed each evening, one of the employees who worked the last shift delivered the daily proceeds to the collections supervisor, who was otherwise not involved in the collection of admission fees during the day. The collections supervisor counted the cash in the presence of the employee and locked in it the drawer of his desk located in the fair office building. Early each morning, the collections supervisor delivered the cash collected the previous day to the bank and received a validated deposit slip that provided the basis for his daily entry in the cash receipts posted in the cash receipts journal to the total recorded by the bank to make sure they were the same.

Although the fair officials recognized the need to improve the admission fee internal control system they decided that the cost of purchasing a safe, cash registers, or any other mechanical devices, installing sales booths, or otherwise altering the physical layout of the main entrance would greatly exceed any benefits that might be derived. However, the officials did agree that the sale of admission tickets must be an integral part of the improvement efforts. They also acknowledged that there many be a need to hire more employees to work at the main entrance

Clearly and concisely recommend specific controls the fair officials can implement next year to improve controls over the collection and recording of admission fees. Organize your recommendations in the form of a list.

Example:

1. Issue pre-numbered admission tickets when the admission fee is received. (Note: You may use this illustrative example in your answer.)

Answer rating: 100% (QA)

Following internal controls can be suggested as improvements Tickets books that are to be issued to ... View the full answer