YOU ARE REQUIRED TO indicate for each of the below procedures/conditions whether it relates to control environment or control activities. Where your answer is control activities, indicate into which category (or categories) of activity it falls (write out the category in full): Five ((i) to (v)) possible control activities: (i) segregation of duties; (ii) isolation of responsibilities; (iii) access/custody controls (physical controls); (iv) authorisation and approval; (v) comparison and reconciliation Tribuna (Pty) Ltd is a large company which manufactures all kinds of lifting equipment e.g., elevators and hydraulic jacks. Each of the following procedures or conditions takes place or exists at the company: 1. Any employee who is found guilty of unauthorised use of company assets or theft is dismissed immediately. 2. Expensive spares and components are kept in a secure area in the warehouse. 3. All employees working on accounting applications on the company's local area network are subject to user identification, password, and user profile controls. 4. The buying clerks are required to sign all purchase orders (in the designated block) and before sending the order to the supplier, must have the order authorised by the chief buyer (who must also sign in the designated block). 5. Management adopts a management philosophy that places emphasis on leadership, sound judgement and ethical behaviour. 6. The production manager approves all overtime hours to be worked before they are worked. 7. The company conducts regular inventory cycle counts. All differences between physical inventory and recorded inventory quantities are carefully followed up. 8. All company cheques must be signed by two authorised signatories. 9. The senior creditors’ clerk reconciles each creditor’s statement with the creditors account in the creditor’s ledger on a monthly basis. Selected reconciliations are performed again by the financial accountant before payment is made. All reconciliations that were performed again are signed by the financial accountant. 10. Receiving clerks are required to count goods received and must sign all GRNs they make out. Two of the components of internal control (in terms of ISA 315 (Revised)) are control environment and control activities.
YOU ARE REQUIRED TO indicate for each of the below procedures/conditions whether it relates to control environment or control activities.
Where your answer is control activities, indicate into which category (or categories) of activity it falls (write out the category in full):
Five ((i) to (v)) possible control activities: (i) segregation of duties; (ii) isolation of responsibilities;
(iii) access/custody controls (physical controls); (iv) authorisation and approval; (v) comparison and reconciliation
Tribuna (Pty) Ltd is a large company which manufactures all kinds of lifting equipment e.g., elevators and hydraulic jacks. Each of the following procedures or conditions takes place or exists at the company:
1. Any employee who is found guilty of unauthorised use of company assets or theft is dismissed immediately.
2. Expensive spares and components are kept in a secure area in the warehouse.
3. All employees working on accounting applications on the company's local area network are subject to user
identification, password, and user profile controls.
4. The buying clerks are required to sign all purchase orders (in the designated block) and before sending the order
to the supplier, must have the order authorised by the chief buyer (who must also sign in the designated block).
5. Management adopts a management philosophy that places emphasis on leadership, sound judgement and
ethical behaviour.
6. The production manager approves all overtime hours to be worked before they are worked.
7. The company conducts regular inventory cycle counts. All differences between physical inventory and recorded
inventory quantities are carefully followed up.
8. All company cheques must be signed by two authorised signatories.
9. The senior creditors’ clerk reconciles each creditor’s statement with the creditors account in the creditor’s ledger
on a monthly basis. Selected reconciliations are performed again by the financial accountant before payment is
made. All reconciliations that were performed again are signed by the financial accountant.
10. Receiving clerks are required to count goods received and must sign all GRNs they make out.
Two of the components of internal control (in terms of ISA 315 (Revised)) are control environment and control activities.
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