The Art Appreciation Society operates a museum for the benefit and enjoyment of the community. During the
The Art Appreciation Society operates a museum for the benefit and enjoyment of the community. During the hours the museum is open to the public, two clerks who are positioned at the entrance collect a five- dollar admission fee from each nonmember patron. Members of the Art Appreciation Society are permitted to enter free of charge upon presentation of their member ship cards.
At the end of each day one of the clerks delivers the proceeds to the treasurer. The treasurer counts the cash in the presence of the clerk and places it in a safe. Each Friday afternoon the treasurer and one of the clerks deliver all cash held in the safe to the bank and receive an authenticated deposit slip, which provides the basis for the weekly entry in the cash receipts journal.
The board of directors of the Art Appreciation Society has identified a need to improve the internal control system over cash admission fees. The board has determined that the cost of installing turnstiles or sales booths or otherwise altering the physical layout of the museum would greatly exceed any benefits that might be derived. However, the board has agreed that the sale of admission tickets must be an integral part of its improvement efforts.
Smith has been asked by the board of directors of the Art Appreciation Society to review the internal control over cash admission fees and suggest improvements.
Indicate weaknesses in the existing internal control system over cash admission fees, which Smith should identify, and recommend one improvement for each of the weaknesses identified. Organize your answer as indicated in the following example:
a. There is no basis for establishing the documentation of the number of paying patrons.
b. Prenumbered admission tickets should be issued upon payment of the admission fee.
Step by Step Answer: