Tom Hall has worked for Dr. Johnson for several years. Tom demonstrates a loyalty that is rare among employees. He is always willing to “cover” for other employees and hasn’t taken a vacation in three years.
One of Tom’s primary duties at the dental office is to open the mail, list checks received, and prepare the bank deposit form.
He also collects cash from patients at the cashier window as patients leave. At times, it is so hectic that Tom doesn’t bother to give patients a receipt for the cash paid on their accounts. He assures them he will see to it that they receive the proper credit. He is so well known by most patients that no one has ever complained.
When traffic is slow in the office, Tom offers to help another employee, Sue, post the payments to patients’ accounts receivable. Dr. Johnson installed a computerized accounting program that requires a user ID and password to log in, but Tom and Sue have found that it is more efficient to just leave the computer on and the receivables file open all the time, and minimize the file when it is not in use.
Instructions
Identify the principles of internal control that may be violated in this situation.
Identify internal control weaknesses in cash receipts and cash disbursements.