a)Yes. Even though the petty cash fund is only $900, if the fund is replenished frequently, a significant amount of cash could be stolen. For example, if the fund is replenished weekly, then $46,800 ($900 × 52 weeks) could be subject to theft.

b)Controls for petty cash include (1) designating one person who is responsible for the fund, (2) maintaining a written record of all payments, (3) requiring support (receipts) for payments from the fund, and (4) periodic review of the funds on hand and the payments by an independent person.