Internal Control of Cash}

OBJECTIVE 23 Edward Tang, a long-time employee of a small grocery wholesaler, is responsible for maintaining the company's cash records and for opening the daily mail, through which the company receives about \(40 \%\) of its daily cash receipts. Virtually all cash received by mail is in the form of cheques made payable to the company. Tang is also responsible for preparing deposits of currency and cheques for the bank at the end of each day.

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1. CONCEPTUAL CONNECTION Explain briefly how Tang might be able to misappropriate some of the company's cash receipts.

2. What internal control procedures would you recommend to prevent this misappropriation?

\section*{Exercise