Question 1 Given the following scenarios, assess the control effectiveness of the client's system and explain how the audit plan would be affected. (i) The internal auditor is helping with a lot of clerical work. She is assigned to help marketing job most of the time. (ii) Company does not have concrete policy on credit sales approval. The sales personnel are given the autonomy to approve credit sales. (iii) There is no database of suppliers available in the purchasing department. Purchasers select suppliers at their discretion. (iv) There were problems with the end of year cut-off; often accruals were omitted and were recorded only at the insistence of the auditor. (v) The company used a system of budgets and standards but appeared to pay little attention to deviation unless they were large. Present your answers in the following structure:
Question 1 Given the following scenarios, assess the control effectiveness of the client's system and explain how the audit plan would be affected. (i) The internal auditor is helping with a lot of clerical work. She is assigned to help marketing job most of the time. (ii) Company does not have concrete policy on credit sales approval. The sales personnel are given the autonomy to approve credit sales. (iii) There is no database of suppliers available in the purchasing department. Purchasers select suppliers at their discretion. (iv) There were problems with the end of year cut-off; often accruals were omitted and were recorded only at the insistence of the auditor. (v) The company used a system of budgets and standards but appeared to pay little attention to deviation unless they were large. Present your answers in the following structure:
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 1
Given the following scenarios, assess the control effectiveness of the client's system and explain
how the audit plan would be affected.
(i) The internal auditor is helping with a lot of clerical work. She is assigned to help
marketing job most of the time.
(ii) Company does not have concrete policy on credit sales approval. The sales personnel are
given the autonomy to approve credit sales.
(iii) There is no database of suppliers available in the purchasing department. Purchasers
select suppliers at their discretion.
(iv) There were problems with the end of year cut-off; often accruals were omitted and were
recorded only at the insistence of the auditor.
(v) The company used a system of budgets and standards but appeared to pay little attention
to deviation unless they were large.
Present your answers in the following structure:
No.
(i)
(ii)
Control
Effectiveness/Reasons
How audit planning will be affected
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