INTRODUCTION Thomas Toys Co (Thomas) is a manufacturer of children's building block toys; they have been trading for over 35 years and they sell to a wide variety of customers including large and small toy retailers across the country. The company's year-end is 31 May 2017 The company has a large manufacturing plant, four large warehouses and a head office. Upon manufacture, the toys are stored in one of the warehouses until they are deapatched to customers. The company does not have an internal audit Each customer has a unique customer account number and this is used to enter sales orders when they are received in writing from customers. The orders are entered by an order clerk and the system automatically checks that the goods are available and that the order will not take the customer over their credit limit For new customers, a sales manager completes a credit application; this is checked through a credit agency and a credit limit entered into the system by the credit controller. The company has a price list, which is updated twice ayear. Larger customers are entitled to a discount this is agreed by the sales director and set up within the customer master file. Once the order is entered an acceptance is automatically sent to the customer by mail email confirming the goods ordered and a likely deapatch date. The order is then sorted by address of customer. The warehouse closest to the customer receives the order electronically and a despatch list and sequentially numbered goods desnatch notes (GDNs) are automatically generated. The warehouse team pack the goods from the deaatch list and, before they are sent out, a second member of the team double checks the desnatch list to the GDN, which accompanies the goods. Once desnatched, a copy of the GDN is sent to the accounts team at head office and a sequentially numbered sales invoice is raised and checked to the GDN. Periodically a computer sequence check is performed for any missing sales invoice numbers. During the year a material fraud was uncovered. It involved cash cheque receipts from customers being diverted into employees' personal accounts. In order to cover up the fraud, receipts from subsequent unrelated customers would then be recorded against the earlier outstanding receivable balances and this cycle of fraud would continue. The fraud occurred because two members of staff who were related coluded. Oe processed cash receipts and prepared the weekly bank reconcilation; the other employee recorded customer receipts in the sales ledger. An unrelated sales ledger clerk was supposed to send out monthly customer statements but this was not performed. The bank reconciliations each had a small unreconciled amount but no-one reviewed the reconciliations after they were prepared. The fraud was only uncovered when the two employees went on holiday at the same time and it was discovered that cash receipts from different customers were being applied to older receivable balances to hide the earlier sums stolen. REQUIRED Identify and explain controls Thomas should implement to reduce the risk of fraud occurring again and, for each control, describe how it would mitigate the risk