8gbr_2004_jun_q - Implementing Audit Procedures (UK Stream)...

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ACCA CERTIFIED ACCOUNTING TECHNICIAN EXAMINATION ADVANCED LEVEL MONDAY 14 JUNE 2004 QUESTION PAPER Time allowed 3 hours ALL FOUR questions are compulsory and MUST be answered Paper T8(GBR) Implementing Audit Procedures (UK Stream) The Association of Chartered Certified Accountants
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ALL FOUR questions are compulsory and MUST be attempted 1 M Limited, a large manufacturing company, has all of its production, stores and head office buildings situated on a single site. The buying and accounts departments are located in the head office building. Following a recent take-over of the company, the new directors have been informed that there is an inadequate level of internal controls over the Purchases and Trade Creditors system. Weaknesses include an absence of control procedures and adequate documentation. Similarly there has been no attempt to use supplier statements to supplement other controls within the system. A ‘batch entry batch processing system’ is used throughout the company’s accounting system, which incorporates fully integrated purchase and general ledgers. Required: (a) State FOUR objectives of having internal controls in a Purchases and Trade Creditors system. (4 marks) (b) Identify the internal controls that should exist in M Limited over the following: (i) Requisitioning and authorisation of purchases; (ii) Acknowledgement of the receipt of goods and the return of goods to suppliers; (iii) Checking and authorisation of purchase invoices prior to batching for processing through the computerised accounting system. (15 marks) (c) Explain how supplier statements should be used to supplement other controls in the Purchases and Trade Creditors system of M Limited. (3 marks) (d) State the meaning of the term ‘batch entry batch processing system’ and explain the use of control totals in such a system. (3 marks) (25 marks) 2 4J–GBRPA Paper 8 GBR 4J–GBRAA
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2 J.J. Limited is a small limited company, which sells mineral water dispensing machines and bottles of mineral water.
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8gbr_2004_jun_q - Implementing Audit Procedures (UK Stream)...

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