Response to the following problem:
Harriett Knox, Ralph Patton, and Monica Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepare a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the record-keeper, receives a copy of the list and posts payments to patients' accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient's check in Dr. Conrad's name and cashes it at the bank. Know then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customers account as a Miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money.
Who is the best person in Dr. Conrad's office to reconcile the bank account?
Would a bank reconciliation uncover this office fraud?
Suggest additional internal controls that Dr. Conrad could implement.