The MegaMax Theatre is located in the MetroMall and employs six cashiers. Two of them work from 12:30 to 6:00 p.m., and the other four from 6:00 to 11:30 p.m. The cashiers receive payments from customers and operate machines that eject serially numbered tickets. Some customers use debit or credit cards, but most payments are cash. The rolls of admission tickets are inserted and locked into the machines by the theatre manager at the beginning of each cashier's shift.
The cashiers' booths are located just inside the entrance to the lobby of the theatre. After purchasing their tickets, customers take them to a doorperson stationed at the entrance to the theatre, about 10 metres from the cashiers' booths. The doorperson tears each ticket in half and drops the ticket stub into a locked box. The other half of the ticket is returned to the customer.
At the end of each cashier's shift, the theatre manager removes the ticket rolls from each cashier's machine, counts the cash and then totals it with the debit card and credit card transactions. Each cash count sheet is initialled by the cashier involved. The cash receipts from the first shift are stored in a safe located in the manager's office until the end of the day.
At the end of the day, the manager deposits the cash receipts from both shifts in a bank night deposit vault located in the mall. In addition, the theatre manager sends copies of the cash count sheets and the deposit slip to the company controller to be verified, and to the accounting department to be recorded.
Finally, the manager compares the total amount received by each of the cashiers to the number of tickets they issued, and notes any discrepancies, which are then discussed with the cashiers before their next shift.
Required:
a. Outline the main internal control considerations for cash receipts generally, and briefly discuss how they apply to MegaMax Theatre's cash receipts procedures.
b. Discuss any weaknesses in the current internal control system that could enable a cashier and/or doorperson to misappropriate cash.