1.You are auditing the financial statements of the Tana Hotel construction project sub- contracted by the Tikur Abay Construction Enterprises. The Tana hotel construction project is run by an independent contractor. You find all employees are paid in cash because Ato Tola –the contractor –believes this arrangement reduces clerical expenses and is preferred by the employees. During the audit you find in the petty cash fund an amount of approximately birr 300 of which birr 265 is stated to be unclaimed wages. Further investigation reveals that AtoTola has installed the procedures of putting any unclaimed wages in petty cash fund so that the cash can be used for disbursement. When the claimant to the wage appears, he is paid from the petty cash fund. Ato Tola contends that this procedures reduces the number of cheque drawn to replenish the petty cash fund and centers the responsibility for all cash on hand in one person in as much as the petty cash custodian distributes the pay envelopes.\nInstruction:\nI)Explain fully whether the system provides proper internal control over unclaimed wages and petty cash. Be specific.\nII)As Ato Tola insists on paying salaries in cash, suggest specific procedures you recommend for better internal control over unclaimed wage and petty cash.