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Read the following story and answer questions 1-3. Brady manages a business with multiple locations around the state. His time spent at work is split

Read the following story and answer questions 1-3.

Brady manages a business with multiple locations around the state. His time spent at work is split between the different locations.

Brady has a relative, Steve, who is an assistant manager at a certain location.

Jen is in charge of selling merchandise and receives cash from the buyers.

At the end of the day, Jen adds up all the cash receipts and returns unsold merchandise as well as cash to Steve.

Terry, the security guard, checks receipts and marks a secure form for each sale which Steve gets at the end of the day.

Steve prepares the bank deposit slips, deposits the cash into the bank, and keeps the bank receipts and unsold merchandise in the office safe. Steve is the only holder of the key to the safe, and he also prepares the bank reconciliation statements. Steven submits his weekly merchandise sale reports to Brady when he visits the store occasionally.

Matt, a newly hired accountant was hired to help Steve's workload, as Steve has frequently volunteered to increase merchandise sales on busy days by assisting Jen at the sales counter, which Brady has approved.

One day, Matt finds from Steve's reports that sales have not changed from prior weeks, even though there was a very obvious and significant increase in customers. This is strange to Matt and he wonders why there is a discrepancy and who may benefit from the discrepancy.

Matt also finds the lack of oversight by Brady to be concerning, wondering why Brady is yet to notice the problem. He wonders to himself if he should report his suspicions, although he has no proof.

Answer the following questions:

1. What are the internal control weaknesses at the store?

2. How could the store improve internal control procedures?

3. Create two explanations for Matt's concerns and formulate recommendations for his next steps.

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