BTN $8-1$ Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr$.$ Gwen Conrad, who is in private practice. Dr$.$ Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients' accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient's check in Dr$.$ Conrad's name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr$.$ Conrad will likely

never miss the money.

Required

$1.$ Who is the best person in Dr$.$ Conrad's office to reconcile the bank statement?

$2.$ Would a bank reconciliation uncover this office fraud?

$3.$ What are some procedures to detect this type of fraud?

$4.$ Suggest additional internal controls that Dr$.$ Conrad could implement.