Randolph Nearenough,a Dance Instructor,runs His Own Dance Instruction Business Employing

Essay

Randolph Nearenough,a dance instructor,runs his own dance instruction business employing 12 dancers and 4 administration staff.He has asked you for some advice on his accounting system and controls,and after visiting and viewing operations,you make the following notes:
• His cousin Datz handles all the incoming mail,customer account records and cash receipts and banking.She checks the monthly bank statement with the firm's records of cash receipts and payments.She is also responsible for all aspects of preparing,recording and administering the payroll.
• The business cheque book is used by whoever is handy,to pay whatever invoices need to be paid.The cheque book is kept in the main office drawer in Datz's office;this drawer always kept locked.
• The key to the drawer is hidden behind Datz's filing cabinet out of the sight of customers;however,all staff are aware of the key's existence and where it is kept,so any staff member can easily get to it.
• Lucy Liu,another one of Randolph's cousins,with a degree in accounting,recently joined the administration staff.As the business is quite successful financially,Randolph has been training her to teach dance,which she enjoys,as there is no accounting task requiring her,and she is often having to read books to fill in her time.
• The firm closes down each December-January for 4 weeks.This enables all staff to take their holidays,without having to train up other staff to do their job while they are away.
a Identify any 4 internal control practices or principles which are not being followed in this business.
b Advise Randolph on what should be done for each one.