Star-Bright Electrical Supply

Star-Bright Electrical Supply is a small store that employs only four people other than the owner. The owner and Employee #1 help customers with their electrical needs. Employee #2 handles all receiving, stocking, and shipping of merchandise. Employee #3 handles the purchasing, payroll, general ledger, inventory, and accounts payables function.

For the past eleven years, Elaine Wright has been Employee #4. Elaine is a very diligent employee who rarely calls in sick, and she takes her vacation days staggered throughout the year so that no one else gets bogged down with her tasks for more than one day.

Elaine handles all of the point-of-sale cash receipts and prepares the daily deposits for the business. Elaine also opens the mail and deposits all cash receipts (approximately thirty percent of the total daily cash receipts). Furthermore, Elaine maintains the AR records and bills the customers who purchase on credit.

Problems

What are the control weaknesses in the above scenario?

What would you recommend to the owner as remedies for the weaknesses you have identified? Assume that no additional employees can be hired.