This is a short discussion piece that needs to be written up in a Word.doc.
Ted owns a theater franchise. John is the manager of the business. William, distantly related to John, is the Assistant Manager. Jodi, a college-aged individual, sells tickets from a glass cage and collects the cash from patrons. As the theater is small, all three of the individuals will take tickets from customers as they enter the show. Ted is not very active in the business.
At the end of the last show, Jodi adds up the cash receipts, reconciles her sales and hands over unsold tickets and cash to William. William prepares the bank deposit slip, deposits the cash in the bank, and keeps the bank receipts and the unsold tickets in the office safe to which he has the only key. William also prepares the bank reconciliation statements and submits weekly sales reports to John.
Questions to be answered:
1.Do you have any concerns with the way the theater is operating? NOTE - Please limit your original post to one concern as that way others in the group can also get in put in on this question.
2.What possible bad things could occur with the current operating structure?
3.What ideas do you have for improvement?
4.Have you ever been witness to great internal controls? How about bad internal controls? Provide as much information as you are willing to share (and as is appropriate)?