The cashier of the Edgemont Company intercepted customer A's check, payable to the company in the amount of \(\$ 500\), and deposited it in a bank account which was part of the company petty cash fund, of which he was custodian. He then drew a \(\$ 500\) check on the petty cash fund bank account payable to himself, signed it, and cashed it. At the end of the month, while processing the monthly statements to customers, he was able to change the statement to \(A\) so as to show that \(A\) had received credit for the \(\$ 500\) check that had been intercepted. Ten days later he made an entry in the cash received book which purported to record receipt of a remittance of \(\$ 500\) from \(A\), thus restoring \(A\) 's account to its proper balance but overstating cash in bank. He covered the overstatement by omitting from the list of outstanding checks in the bank reconciliation two checks, the aggregate amount of which was \(\$ 500\).

Required:

Enumerate the weaknesses in the existing system and recommend one or more improvements for each weakness to strengthen internal control over cash receipts. Organize your answer sheet as follows:

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Weakness Improvement(s) AICPA