AUI3702 Assignment2 Semester2 2016

AUI3702 Assignment2 Semester2 2016 - AUI3702 Assignment 2...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
AUI3702 Assignment 2 Semester 2 2016 Unique Number: 789808 Student Number: 49075594 Question 1 1.1 D 1.2 A 1.3 B 1.4 C 1.5 A 1.6 B 1.7 C 1.8 D 1.9 B 1.10 C Question 2 2.1 Risks addressed by the internal controls: 1. A payment might be made to a customer who is not creditworthy; including will not pay, resulting in a loss to the company. 2. Despatch errors may occur resulting in incorrect goods or quantities despatched or goods delivered to the wrong customer. 3. Wages might be paid to fictitious employees resulting in a loss to the company. 4. Unauthorised amendments to employee records resulting to fictitious additions or unauthorised changes in wages rates. 5. Goods ordered from unauthorised supplier which can result in the items of inferior quality or overpriced. 6. Unauthorised loan might be obtained on behalf of an entity for fictitious purposes resulting to losses to the company. 2.2 Test of controls associated with internal controls: 1. Inspect the internal sales order to confirm that the credit controller did sign as proof of authorization 2. Inspect the delivery note to confirm that it was date stamped by the security guard as a proof that all the goods delivered were on the delivery list. 3. Attend the wage payouts, and observe that employees present identification and sign the acknowledgement of receipts, and compare to the information on the payroll. 4. Inspect the payroll amendments forms to confirm that it has been authorised by the human resource manager. 5. Inspect the supporting documentation to confirm that quotes were obtained from a number of suppliers before purchasing.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6. Inspect the minutes to confirm that the directors obtained the power of attorney to sign a loan contract on behalf of the company. Question 3 3.1 Ratios 3.1.1 Inventory turnover ratio 2014 Formula = Cost of sales/Average inventory = 40 600/22 600 = 1.80 times Interpretation: Inventory turnover has increased. This is to the advantage of the organization; inventory has been converted into profit more frequently than was the case in 2013.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern