Construction Company, headquarted in Terre Haute, Indiana, built a Rest Easy Motel 35 miles east of Terre Haute. The construction foreman, whose name was Monty, hired the 40 workers needed to complete the project. Monty had the construction workers fill out the necessary tax forms. and he sent the employment documents to the home office, which opened a payroll file for each employee.
Work on the motel began on April 1 and ended Sept 1. Each week, Montey filled out a time card of the hours worked by each employee during the week. Monty faxed the time sheets to the home office. which prepared the payroll checks on Friday morning. Monty drove to the home office after lunch on Friday, picked up the payroll checks, and returned to the construction site. At 5 pm on Friday, Monty distributed the payroll checks to the workers.
a. Describe in detail the main internal control weakness in this situation. Specify what negative results could occur because of the internal control weakness.
b. Describe what you would do to correct the internal control weakness.