Understanding segregation of duties in a small businessBig State Computers has premises on the main street of a large regional city. The business is owned by Max and Betty Waldup, who purchased it three years ago. Betty has an extensive background in IT and has a talent for diagnosing and solving problems with computers that are brought in for repair. Max also has an IT background and oversees the sales and administration staff. They employ three people: a computer technician who assists Betty, a part-time salesperson, and a part-time bookkeeper. Sally, the bookkeeper, enters transactions into a simple computerized accounting system. Sally is also responsible for issuing invoices and monthly statements to customers who have service contracts with the business. These customers are generally other businesses who ask Betty to visit their premises for routine and emergency repairs and who purchase software and hardware from the business.

Max and Betty have worked diligently over the last three years, but they are having cash flow problems. Their bank manager has requested a meeting to discuss the business's poor cash balances. The bank manager asks Max and Betty to prepare for the meeting by analyzing their accounts receivable and customer receipts. Max and Betty review the accounts receivable ledger and find that it is not up to date. They also discover that customer statements have not been printed or mailed to customers for four months. They are unable to identify from the cash receipts journal which clients have paid their accounts.

Required

1. Discuss the attitude and control consciousness of Big State Computers's management.
2. Which duties should be segregated in this business? Recommend an appropriate allocation of duties for the personnel at Big State Computers.