North State Computers has premises in the main street of a large regional city. The business is owned by Bob and Mary Winters, who purchased it three years ago. Mary has an extensive background in IT and has a talent for diagnosing and solving problems with computers that are brought in for repair. Bob also has an IT background and oversees the sales and administration staff. There are three staff in the business: a computer technician who assists Mary, a part-timer who helps with sales and a junior trainee, Cara, who does other tasks such as banking. Cara is also responsible for issuing invoices and statements to clients who have a service contract with the business. These clients are generally other businesses that ask Mary to visit their premises for routine and emergency repairs and that purchase software and hardware from the business. Bob and Mary have worked very hard over the last three years but they have cash-flow problems. Their bank manager has requested a meeting to discuss the business’s growing overdraft. The bank manager asks Bob and Mary to prepare for the meeting by analysing their accounts receivable and customer receipts. Bob and Mary review the accounts receivable ledger and find that it is not up to date. They also discover that client statements have not been issued for four months. They are also unable to identify from the cash receipts journal which clients have paid their accounts.

Required

(a) Discuss the attitude and control consciousness of North State Computers’ management.

(b) Which duties should be segregated in this business? Recommend an appropriate allocation of duties for the staff at North State Computers.