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Assume that Florida Tech operates a museum for the benefit and enjoyment of the community. When the museum is open to the public, two clerks who are positioned at the entrance collect a $5.00 admission fee from each nonmember patron. Members of the Friends for the Florida Tech Museum are permitted to enter free of charge upon presentation of their membership cards. At the end of each day, one of the clerks delivers the proceeds to the treasurer. The treasurer counts the cash in the presence of the clerk and places it in a safe. Each Friday afternoon, the treasurer and one of the clerks deliver all cash held in the safe to the bank and receive an authenticated deposit slip that provides the basis for the weekly entry in the accounting records. The Friends of the Florida Tech Museum has a board of directors. They have identified a need to improve the internal controls over cash admission fees. The board has determined that the cost of installing turnstiles, sales booths, or otherwise altering the physical layout of the museum will greatly exceed any benefits. However, the board has agreed that the sale of admission tickets must be an integral part of its improvement efforts. You have been asked by the board of directors to review the internal control over cash admission fees and provide suggestions for improvements. REQUIRED: Indicate weaknesses in the existing internal controls over cash admission fees and recommend at least one improvement for each of the weaknesses identified. Indicate which of the weaknesses might increase the likelihood of (1) the misappropriation of assets or (2) fraudulent financial reporting. Why?
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