Advanced Audio Productions makes all sales on account. Cash receipts arrive by mail. James Gilette opens envelopes and separates the checks from the accompanying remittance advices. Gilette forwards the checks to another employee, who makes the daily bank deposit but has no access to the accounting records. Gilette sends the remittance advices, which show the cash received, to the accounting department for entry in the accounts. Gilette's only other duty is to grant sales allowances to customers. (A sales alloweance decreases the amount receivable.) When he receives a customer check for less than the full amount of the invoice, he records the sales allowance and forwards the document to the accounting department.

Requirements 

You are the new controller of Advanced Audio Productions. Write a memos to the company president identifying the internal control weakness in this situation. State how to correct the weakness.