You are the audit senior assigned to the audit of Speedy Ltd, a motor vehicle spares company.  

You obtain an understanding of the ordering function within the acquisition and payments cycle at Speedy Ltd. 

The order clerk prepares the purchase requisition by accessing the purchase order module on the system with his username and password. The system is set up so that once the order clerk keys in the inventory item code, the screen will automatically reflect the description of the goods and identify from the approved supplier list which supplier the item should be ordered from, along with the supplier inventory code. If the inventory item code is incorrect, the order clerk will be unable to proceed with the purchase requisition. 

Which one of the following programme controls has been implemented above, ensuring that the correct goods are being purchased? 

The company has very good internal control, 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

* monitoring of controls

The following piece of information relates to the revenue and receipts cycle:

Over the years the company has developed a reputation for ethical and honest business practice. Any employee, who doesn’t comply with the company’s ethical code, is dismissed.

Identify the component of internal control to which the above information relates:

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:

Once the credit controller has investigated a potential client’s creditworthiness, he/she signs the relevant credit application before taking it to the financial accountant for final authorisation.

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

An

accountant at a South African textile company discovers that the same

individual is responsible for requesting raw materials, authorising their

transfer, and recording the transaction in the inventory system. What is the most

significant business risk associated with this lack of segregation of duties?

If a director has a personal financial interest

in

a matter to be considered at a board meeting

1.             

2.             

3.             

4.             

You are the audit senior assigned to the audit of Speedy Ltd, a motor vehicle spares company.You attend the year-end inventory count at Speedy Ltd and note the following procedures that take place:

(i) The inventory count procedures are addressed to the auditors and management of Speedy Ltd.

(ii) The inventory count procedures include the method of counting and a copy of the warehouse floor plan.

(iii) The inventory count procedures specify that the count teams consist of warehouse personnel and the auditors.

(iv) Inventory sheets are pre-printed, numerically sequenced with inventory details and description and one column to capture the quantity per counted item.

(v) Once inventory has been counted, it is marked with a green sticker on the item illustrating that it has been counted.

From the above procedures performed at the year-end inventory count, identify which of these procedures are internal controls in the inventory count?

MNT

Auditors has been appointed as the external auditor of Mzansi Retail Group

(Pty) Ltd (Mzansi Retail). The company’s financial year-end is 30 June. You are

the

audit

senior in charge of the audit for the 2025 year-end.

Background

information on salaried employees

The

company operates across seven business units with approximately 50 salaried

staff members working in the following departments: store operations, supply

chain, warehousing, merchandising, sales, finance and administration, and

information technology. Each department is managed by a senior supervisor who

reports to the operations director, Teboho Nkosi.

Identify

the most appropriate business risk for Mzanzi Retail for the identified control

weakness?

In the

acquisitions and payments cycle, indicate the main purpose of authorising a

purchase requisition.