Green-Green Market Ltd is a wholesaler supplying

fresh fruits and vegetables to several large retail grocery stores across South

Africa. Since fruits and vegetables are perishables, there is a high inventory

turnover at Green-Green Market Ltd. There is also a high risk of theft by

personnel since the majority of items are easy to hide and easy to resell.

The following internal control measure has

been implemented:

Any employee at Green-Green Market Ltd

who is caught attempting to steal inventory is dismissed immediately.

This control can be categorised as a:

You are the audit senior assigned to the audit of Speedy Ltd, a motor vehicle spares company. You obtain an understanding of the invoicing function within the revenue and receipts cycle at Speedy Ltd.

Once the goods have been picked from the warehouse, the despatch clerk will check the goods against the picking slip to confirm everything has been picked. He will then select the confirm option on the system to generate a sales invoice. Both the despatch and picking clerks do not have write access to the file so that no amendments can be made to the invoice. 

Which one of the following control objectives will be achieved by the above-mentioned procedure?

A company’s accounting systems are all computerised and located on a local area network. The following control procedure is in place at the company:

When a debtor exceeds their payments terms, the system automatically puts a “hold” on the debtor’s account, which prevents the debtor from making any further purchases.

Select the correct alternative that indicates whether the practice is an application or general control, and also indicate the category of internal control the practice relates to.

Green-Green Market Ltd is a wholesaler supplying

fresh fruits and vegetables to a small number of large retail grocery stores

across South Africa. Green-Green Market Ltd has recently decided to expand

sales to smaller retail grocery stores. The following control procedure takes

place in the revenue and receipts cycle:

All journal entries for the write-off of

a debtor, are authorised by Mr Doubtful, the credit controller and the senior

financial accountant, Mr Moneymaker.

Which one of the following alternatives best

describes the component of

internal control the above procedure relates to?

You are the audit senior assigned to the audit of Speedy Ltd,a motor vehicle spares company.You obtain an understanding of the inventory function from Mr Thato, the warehouse manager.

He informs you that two pickers in the warehouse are responsible for picking the goods to fulfil customer orders but the despatch clerk, Mr Jazzy, is the only one allowed to despatch the fulfilled orders to the customers. Which one of the following alternatives best describes the control activity achieved by the above-mentioned procedure performed in the warehouse of Speedy Ltd?

There are

characteristics of the capital expenditure cycle relating to the acquisition of

fixed assets, and compensating controls are therefore necessary. Choose the

option that identifies why these compensating controls are important in capital

expenditure?

The company has

good internal controls, which addresses and is based on the generally accepted

components of internal control, namely,

·       the control environment

·       the risk assessment process

·       the information system relevant to financial reporting

·       control activities

·       the monitoring of controls

The following

piece of information relates to the payroll and personnel cycle of a company:

The company uses

a payroll software application that is compatible with the SARS e-filling

system.

From the

following list of options, identify the component of internal control to which

the above statement relates:

Green-Green Market Ltd is a wholesaler supplying

fresh fruits and vegetables to a number of large retail grocery stores across

South Africa. Since fruits and vegetables are perishables, there is a high

inventory turnover at Green-Green Market Ltd. The following control procedure takes

place in the inventory and production cycle:

Ms Apple, the inventory controller, has

read access to the inventory master file, but no write access.

This control can be categorised as a: