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View Building in Dubai which has 100 floors has a viewing platform at the top of the tower. People pay to go to this platform and see the whole of Dubai and beyond. Before entering the platform, adults pay $50 and children $25 each to the cashier, who enters their details into the computer system and prints out a card ticket. The ticket indicates the price paidand name of the customer. The customer then takes the ticket to the attendant standing outside the gate to the platform. The attendant takes the tickets and admits the customers to the platform. The attendant is then required to tear the tickets into half and throw them into the bin.
At the end of the day, the manager counts the money in the ticket booth and compares this with what has been entered into the computer to produce the tickets. He then takes the money to the bank and deposits it in the company account. He keeps the bank slips in a file in his office which is normally freely accessible to the other employees. At the end of each month, the accountant compares the deposits per the bank statement with the daily takings compiled by the computer system.
Required
1. What are the most important internal control principles and procedures being used by View Building to ensure control over cash receipts?
2. Write a memo to management explain whether or not these internal controls are adequate and why and suggest improvements to the internal control systems.
Verified Expert
The discussion is an analysis of internal control methodology of cash receipts in view building of Dubai. The process consist of analysis of the existing system and secondly a memo is prepared to further improve the controls existing at present. Recommendations are presented in brief.
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