10-28 (OBJECTIVES 10-2, 10-4, 10-6) Appliances Repair and Service Company bills all cus- tomers rather than collecting in cash when services are provided. All mail is opened by Tom Gyders, treasurer. Gyders, a CPA. is the most qualified person in the company who is in the office daily. Therefore, he can solve problems and respond to customers' needs quickly. Upon receipt of cash, he immediately prepares a listing of the cash and a duplicate deposit slip. Cash is deposited daily. Gyders uses the listing to enter the financial transac- tions in the computerized accounting records. He also contacts customers about uncol- lected accounts receivable. Because he is so knowledgeable about the business and each customer, he grants credit, authorizes all sales allowances, and charges off uncollectible accounts. The owner is extremely pleased with the efficiency of the company. He can run the business without spending much time there because of Gyders' effectiveness. Imagine the owner's surprise when he discovers that Gyders has committed a major theft of the company's cash receipts. He did so by not recording sales, recording improper credits to recorded accounts receivable, and overstating receivables. a. What weaknesses in the company's processes might have permitted the fraud? b. What suggestions do you have for changing the process to reduce the future poten- tial for fraud? ring Company employs about 50 ed