c) When auditing the client's company, the external auditor should be familiar with theproper design and use of documents and records in order to access the internalcontrol reliability. Assume you are an auditor and you are currently auditing LappySdn. Bhd. You have identified several issues while performing the audit. Sarah theclerk who handles the client's files went for one-month unpaid leave while theContinued... customer invoices are not arranged in a file accordingly. It was a messy situation andyou are unable to track the invoices.When you requested for the invoices from the other colleagues they were unsureabout it as Sarah was the only one who handles the documentation part. Whileauditing the customer payment documentation you also realise that resit was notissued immediately to customers who made payment. Resit were issued to customerlong after payment is received. Another very obvious issue you notice was that mostthe internal documents were without signature or sign of approval by relevantpersonnel.Required:As an auditor, provide five suggestions to Lappy Sdn. Bhd. on improving the control overdocuments and record keeping.

Internal control helps organizations to achieve their goals and objectives, protect their assets…

=) When auditing the client's company, the proper design and use of documents and records in order to access the internal control reliability. Assume you are an auditor and you are currently auditing Lappy Sdn. Bhd. You have identified several issues while performing the audit. Sarah the ile the

=) When auditing the client's company, the proper design and use of documents and records in order to access the internal control reliability. Assume you are an auditor and you are currently auditing Lappy Sdn. Bhd. You have identified several issues while performing the audit. Sarah the ile 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

c) When auditing the client's company, the external auditor should be familiar with the
proper design and use of documents and records in order to access the internal
control reliability. Assume you are an auditor and you are currently auditing Lappy
Sdn. Bhd. You have identified several issues while performing the audit. Sarah the
clerk who handles the client's files went for one-month unpaid leave while the
Continued...

customer invoices are not arranged in a file accordingly. It was a messy situation and
you are unable to track the invoices.
When you requested for the invoices from the other colleagues they were unsure
about it as Sarah was the only one who handles the documentation part. While
auditing the customer payment documentation you also realise that resit was not
issued immediately to customers who made payment. Resit were issued to customer
long after payment is received. Another very obvious issue you notice was that most
the internal documents were without signature or sign of approval by relevant
personnel.
Required:
As an auditor, provide five suggestions to Lappy Sdn. Bhd. on improving the control over
documents and record keeping.

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