Suggest internal controls that have been violated and ways to improve the system currently in operation?

Question

Ria is a cashier. when she recieves money from customers she issues receipt , but banking is carried out every friday.Eventhough she has a room of her own she doesnt have a safe to keep the money. she does banking, monthly reconcilation and is in chare of debtors account. its 3 yrs since her last annual leave & she does not plan 2 take one this year

i think that the internal controls that have been violated are :

1) no safe to keep money
2)she shud bank every 2nd day
3)she may embezzle money

Improve system by :

1.bank every 2nd day
2.she shud go on leave

Answer 1

The internal controls violated here is that the employee who accepts money from and issues receipts to customers should not be doing the banking or monthly reconciliations. There should be a separate employee for each of those three duties to prevent possible embezzlement.

Requiring employees who handle any part of the cash flow to take annual vacations will also help prevent embezzlement. They are forced to let someone else see the accounts when they go on leave.

Not having a safe for cash and only going to the bank once a week is not usually considered an internal control, just stupidity.