A small local restaurant employs 15 people, including serving staff, cooks and cleaners.

Due to a small budget, the accountant deals with all items relating to the financial matters of the business, from recording journal entries to the preparation of financial statements. Among her payroll function duties, she prepares paperwork for new hires (made by the general manager), collects time cards at the end of each pay period (filled in by employees themselves), inputs all payroll data, completes payroll earning records, the payroll register and signs off on direct deposits from the operating account.

The general manager does not review nor authorize the financials or payroll processed, as he is often too busy dealing with customers and other operational matters and trusts the accountant to just ‘get the job done’.

Required:

In the format of a 'report', outline to the general manager;

1) internal control issues within this scenario, and

2) suggest what can be done to implement better controls

Be sure to cite resources that you are basing your recommendations on.