Identify the type of audits the CAE will consider in her planning specifically for findings number 1, 2, 4 and 7 Plastic Designs Ltd previously outsourced the internal audit services. The cost of outsourcedinternal audit services compelled the board of Plastic Designs to establish its own. Theprevious internal auditors compiled a summary of the following significant internal auditfindings and presented them to the CAE to start the planning of audit engagements:1) Password and logon controls for employees in finance department does not enforcepassword minimum length requirements which compromises confidential information ofthe company.-2) Plastic Designs Ltd started an internship programme hosting twenty (20) graduatesacross the company for the past five years. However, the programme has not beenevaluated to ascertain whether it achieves its objectives.3) Plastic Designs Ltd management is not prepared to spend time and resources on thedevelopment of corporate code of conduct.4) The lack of debtors' management policy caused the company to write off bad-debtsamounting to R3 million in 2019/2020 financial year.5) In the past eight (8) months there have been four (4) key resignations in the qualitydepartment and management does not demonstrate interest in replacing replacement ofthose staff members.6) Information from top management does not reach lower level employees which affectsthe ability to achieve operational objectives.7) Potential impact of the waste produced from manufacturing processes on the surroundingenvironment had not be identified and assessed in the past ten.

Control environment component. Monitoring activities component. Control environment component.…

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services com rnal auditors presented the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Identify the type of audits the CAE will consider in her planning specifically for findings number 1, 2, 4 and 7

Plastic Designs Ltd previously outsourced the internal audit services. The cost of outsourced
internal audit services compelled the board of Plastic Designs to establish its own. The
previous internal auditors compiled a summary of the following significant internal audit
findings and presented them to the CAE to start the planning of audit engagements:
1) Password and logon controls for employees in finance department does not enforce
password minimum length requirements which compromises confidential information of
the company.-
2) Plastic Designs Ltd started an internship programme hosting twenty (20) graduates
across the company for the past five years. However, the programme has not been
evaluated to ascertain whether it achieves its objectives.
3) Plastic Designs Ltd management is not prepared to spend time and resources on the
development of corporate code of conduct.
4) The lack of debtors' management policy caused the company to write off bad-debts
amounting to R3 million in 2019/2020 financial year.
5) In the past eight (8) months there have been four (4) key resignations in the quality
department and management does not demonstrate interest in replacing replacement of
those staff members.
6) Information from top management does not reach lower level employees which affects
the ability to achieve operational objectives.
7) Potential impact of the waste produced from manufacturing processes on the surrounding
environment had not be identified and assessed in the past ten.

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