In th scene Sarah points out to him their incapacity to gain access to relevant

In th scene sarah points out to him their incapacity

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the firm’s cafeteria and explicitly discloses the gravity of the threat to TYSL Accountants. In the scene, Sarah points out to him their incapacity to gain access to relevant documents produced by Premintel, further revealing how the threat has engulfed their work. The safeguard outlined in the previous section would also be relevant in this scenario - rotating the audit team is the best way to minimize closeness and the possibility of D-MERTON’s managing holding TYSL hostage. 4. Identify and briefly describe two inherent risks and two control risks of D-MERTON and explain how TYSL Accountants have responded to each risk, in planning the audit of DMERTON. Inherent Risks Owing to the fact that D-MERTON is a futuristic corporation, most of its products are at a risk of obsolescence. With technology changing on a daily basis, new processes are likely to result in the firm’s goods becoming irrelevant or obsolete in the market. In such a scenario, the goods are unable to be valued correctly, and this risk is inherent in D-MERTON’s business. Presently, the firm is worried that S1A would not perform s expected in the marketplace. To avert any risks, TYSL Accountants recommend the adoption of impairment trigger to safeguard against the situation. The other risk pertains to the complexity of D-MERTON’s products, which brings about the possibility that they might fail to meet the needs of end users. In view of Knechel & Salterio (2016), complex products demand high knowledge levels even for the firm’s directors and auditors. As mentioned by Liz, the chair of the audit committee, since the people have given prominence to the use of technology in the products, they have no choice but to follow suit. Besides, Patrick asserts that while the technology is complicated, they have received convincing guarantees that versions of the S1 are appropriate following a meeting with D-
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FALSE ASSURANCES 6 MERTON’s head of technology. On the contrary, Sarah, acting on behalf of TYSL Accountants, alleviated this risk by sourcing a skilled and independent expert to meet with the head of technology at D-MERTON’s and paint a clear picture of the goods. Control Risks The first control risk at D-MERTON was weak and disjointed systems. The risk was uncovered after a group of attackers accessed the corporation’s central finance system via the subsidiary’s financial systems. According to Bell & Griffin (2012), disorderly systems open a gateway for error, fraud, or both. It was a red flag, which drew TYSL's attention to undertake further investigations into the firm to unearth aspects, which might have given rise to error or fraud. The other control risk was the weak internal control system D-MERTON had at the top level. Going back to a talk that ensued between Richard, the CEO, and Tom, the head of global sales, revealing the lack of controls by the firm’s management. During the conversation, Tom suggested the need for making smaller payments to avoid drawing unnecessary attention. He
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  • Fall '15
  • Mr. Njoroge
  • TYSL Accountants

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