,AUI3702 Assignment 2 (COMPLETE ANSWERS) Semester 1
2025 - DUE 7 April 2025; 100% correct solutions and
explanations.
QUESTION 1 15 MARKS
The chief audit executive (CAE) decided that, while you are busy
assisting the procurement department, you may as well perform
the assurance audit of the procurement function originally
scheduled for later in the year.
After identifying the risks, you have compiled the following audit
objectives to include in your audit programme.
I
Validity: To determine that only valid purchases are recorded.
II
Completeness: To determine that all the goods received from
suppliers are recorded as purchases in the purchase journal.
III
Valuation: To determine that the liability in respect of credit
purchases is recorded at the correct value.
AUI3702/1/2025
3
IV
Cut-off: To determine that purchases accounted for in the current
period relate only to goods received in the current period.
REQUIRED MARKS
, 1.1
List six (6) planning steps you would need to undertake to
properly plan the internal audit of the procurement cycle.
(3)
Planning Steps for the Internal Audit of the Procurement
Cycle
To ensure an effective internal audit of the procurement function,
the following six planning steps should be undertaken:
1. Understand the Procurement Process and Associated Risks
Before conducting the audit, it is crucial to gain a thorough
understanding of the procurement cycle, including purchasing,
receiving, recording transactions, and payment processes. This
involves:
Reviewing procurement policies and procedures.
Identifying key risks, such as fraud, unauthorized purchases,
and non-compliance with procurement regulations.
Understanding the roles and responsibilities of procurement
personnel.
2. Define the Audit Scope and Objectives
The scope of the audit must be clearly defined to ensure that all
critical areas of procurement are covered. This involves:
2025 - DUE 7 April 2025; 100% correct solutions and
explanations.
QUESTION 1 15 MARKS
The chief audit executive (CAE) decided that, while you are busy
assisting the procurement department, you may as well perform
the assurance audit of the procurement function originally
scheduled for later in the year.
After identifying the risks, you have compiled the following audit
objectives to include in your audit programme.
I
Validity: To determine that only valid purchases are recorded.
II
Completeness: To determine that all the goods received from
suppliers are recorded as purchases in the purchase journal.
III
Valuation: To determine that the liability in respect of credit
purchases is recorded at the correct value.
AUI3702/1/2025
3
IV
Cut-off: To determine that purchases accounted for in the current
period relate only to goods received in the current period.
REQUIRED MARKS
, 1.1
List six (6) planning steps you would need to undertake to
properly plan the internal audit of the procurement cycle.
(3)
Planning Steps for the Internal Audit of the Procurement
Cycle
To ensure an effective internal audit of the procurement function,
the following six planning steps should be undertaken:
1. Understand the Procurement Process and Associated Risks
Before conducting the audit, it is crucial to gain a thorough
understanding of the procurement cycle, including purchasing,
receiving, recording transactions, and payment processes. This
involves:
Reviewing procurement policies and procedures.
Identifying key risks, such as fraud, unauthorized purchases,
and non-compliance with procurement regulations.
Understanding the roles and responsibilities of procurement
personnel.
2. Define the Audit Scope and Objectives
The scope of the audit must be clearly defined to ensure that all
critical areas of procurement are covered. This involves:
