Phil Goss has worked for Dr. Stan Hilton for several years. Phil demonstrates a loyalty that is rare among employees. He hasn't taken a vacation in the last three years. One of Phil's primary duties at the medical office is to open the mail and list the checks received. He also takes cash from patients at the cashier window as patients leave. At times it is so hectic that Phil doesn't bother with giving each patient a receipt for the cash paid on their accounts. He assures them he will see to it that they receive the proper credit. When the traffic is slow in the office Phil offers to help Pam post the payments to the patients' accounts receivable. She is always happy to receive his help because he is a very conscientious worker.
Instructions
Identify any principles of internal control that may be violated in this medical office situation.

Violations:
1. It is Pam's responsibility to post payments to patient accounts. In allowing Phil to assist her the establishment of responsibility principle is violated.
2. Although it appears to be a small office it is not appropriate that Phil both opens the mail receives and records cash receipts from patients and also appears to have custody of cash. This situation violates the segregation of duties principle. By posting to patients' accounts it would be possible to post credits to patient accounts and pocket the cash.
3. The documentation principle is violated when patients are not given cash receipts. Although many professional offices do not have cash registers computerized or manual receipts are customary and necessary.
4. Independent internal verification is also being violated. There is no independent counting of the cash and comparison to total receipts.
5. Human resource controls are being violated. There is no mention of Phil being bonded. Also personnel should be required to take vacations.