While auditing the financial statements of !Homsai Corporation, the certified public accounting firm of !Fredricks and Joseph discovered that its clients legal expense account was abnormally high. Further investigation of the records indicated the following:

Since the beginning of the year, several disbursements totalling N$115,000 had been made to the law firm of Basson Attorneys.

Basson Attorneys were not Homsai Corporation. A review of the cancelled checks showed that they had been written and approve.

Mary Garises other duties included performing the end-of-month bank reconciliation. Subsequent investigation revealed that Basson Attorneys are representing Mary Garises in an unrelated embezzlement case in which she is the defendant. The checks had been written in payment of her personal legal fees.

Required

1. What control procedures could Petty Corporation have employed to prevent this unauthorized use of cash?

2. Comment on the ethical issues in this case