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Question: internal controls cash the local swimming club wants to...

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Internal controls – cash The local swimming club wants to raise some money so that it can install a solar heating system at the local pool. The major fundraising event is a pool party - with live music, free BBQ, and amusements for children. Entry to the pool party is $20 per person, with tickets able to be pre-purchased at the swimming pool entry desk before the event, or people can pay $20 at the entry desk on the day of the festival. 2,000 unnumbered tickets were printed, and these were kept in a box at the swimming pool entry desk. As tickets were sold, the money was put into a locked money box kept at the entry desk. A number of swimming pool staff were responsible for organising the event. Each of these people had a key to the money box and were told that if they took money out to pay for event expenses, they need to put a note in the box saying how much they took and what it was used for. Ticket sales were going well, and the money box was getting quite full after three weeks. The swimming pool staff member who was on the entry desk at the pool that day counted the money, prepared the bank deposit slip and deposited the money into the new bank account that had been opened for the fundraising event. On the day before the pool party, unsold tickets were ripped up and disposed of – as they were no longer needed. (If people wanted to come to the pool party and hadn’t pre-purchased a ticket, they would just need to pay $20 entry at the pool entry desk.) On the day of the pool party, one of the swimming club members worked at the pool entry desk, collecting tickets from people attending the party and collected money from people who hadn’t pre-purchased them. As tickets were presented at reception, they were taken from the attendee, ripped up and disposed of. People attending the party were also able to purchase wrist-bands at the entry desk, for unlimited access to the amusements – for $5 per person. As wrist bands were sold, the money was added into the money box. At the end of the pool party, $500 was taken out of the money box and paid to the DJ. The DJ did not provide a receipt. It was estimated that 1,200 people attended the pool party, and there were approximately 200 children that had wrist-bands for the amusements. The following day, the fundraising event bank account was closed, which had $3,200 in it, and there was also $1,100 in the money box. The swimming club treasurer was surprised that the pool party had only netted $4,300 in cash. Required: Identify the internal control weaknesses in this scenario, and suggest how each could be corrected.

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