Karl is a well-respected manager at a retailer business in the city who was given an award for not taken any vacation in his 30-years at the store. One day, an internal auditor sees Karl use blank sides of paper to make receipts for customers who pay in cash. When asked about this, Karl responds that he simply wanted to help save some money and help the reputation of the business as pro-environment and pro-green. Then, Karl is seen counting cash in the register at the end of his shift, journalizing the sales, and depositing it at the bank himself.

Discuss what internal control principles were violated and what should the store do to fix them