Statement: The officer-in-charge of a company has a strong hunch that some cash is missing from the office safe.\nCourses of Action:\nI. Immediately recount the cash with the help of authorised staff and reconcile it with the day book, cash book, and balance sheet.\nII. Inform the police at once.

Introduction / Context:
“Course of Action” problems test whether the proposed responses are necessary, sufficient, and proportionate given the information in the statement. Here, we have a hunch—a suspicion—of missing money from a company safe. Good governance demands internal verification and documentation before escalating to law enforcement.

Given Data / Assumptions:

• There is no confirmed theft report, only a suspicion of shortage.
• Proper records (cash book, vouchers, ledgers) and authorised staff are available.
• Police involvement requires preliminary due diligence to avoid false reporting.

Concept / Approach:
Apply proportionality and sequence. First verify facts through routine controls (counting, reconciliation, audit trail). Escalate externally only if an irregularity persists or fraud indicators emerge. This reduces noise, protects reputations, and preserves investigative integrity.

Step-by-Step Solution:
1) Conduct a joint recount with two-person control; prepare a variance sheet if any shortfall exists.2) Reconcile denominations with vouchers, day book, and cash book totals; check last safe-opening log.3) If discrepancy remains and cannot be explained by posting errors or timing differences, escalate per company policy (internal audit, vigilance, then—if indicated—police).

Verification / Alternative check:
If the shortage is a simple posting error or timing difference, police intimation would be premature and potentially defamatory. Internal checks are faster, cheaper, and standard accounting practice.

Why Other Options Are Wrong:
Only II: Calling police on a mere hunch is disproportionate and may waste public resources. Either/Neither/Both: “Either” permits the disproportionate option; “Both” assumes simultaneous police action without verification; “Neither” ignores the obvious first step of reconciliation.

Common Pitfalls:
Equating suspicion with proof; skipping audit trails; failing to document the recount properly (signatures, time, denominations).

Final Answer:
Only course of action I follows.