CAS3701 Assignment 6
(COMPLETE ANSWERS)
2025 - DUE 19
September 2025
[Document subtitle]
[School]
[Course title]
,CAS3701 Assignment 6 (COMPLETE ANSWERS) 2025 - DUE 19 September 2025
Course
Capstone in Accounting Sciences (CAS3701)
Institution
University Of South Africa (Unisa)
Book
Accounting
CAS3701 Assignment 6 (COMPLETE ANSWERS) 2025 - DUE 19 September 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
Background ElectroMart Limited (ElectroMart) is a well-known South African retailer,
specialising in consumer electronics, home appliances, and office supplies. The company
operates nationwide and has recently expanded its operations into neighbouring countries.
ElectroMart serves a broad customer base, ranging from individual consumers to large
corporations. The company's sales team comprises 30 sales representatives, divided equally into
three key provincial areas: Western Cape, Gauteng, and KwaZulu-Natal. These representatives
are Identify and explain four key business risks arising from ElectroMart’s current sales
recording process.
For each risk identified, discuss the potential impact on the business if the risk is not effectively
managed. 6. After introducing the revised compensation plan, what Key Performance Indicators
(KPIs) should ElectroMart’s management monitor to identify early signs of poor performance or
potential risk in the plan? For each KPI, explain what it measures and how it can help
management take corrective action. responsible for managing customer relationships and
promoting ElectroMart’s products in their areas.
What would you do if you were John? Would you report the sale accurately, or would you
misclassify it to meet the quota?
, Discuss the possible implications for John and How could the revised commission structure
increase the risk of material misstatement in Revenue?
Discuss the risk as well as its impact.
6. Assume you are the auditor of ElectroMart. What substantive audit procedures would you
perform to verify that commission expenses are accurately and completely recorded for the
year ended 31 December 2024 ElectroMart. 4.
What manual and computer controls could ElectroMart implement to ensure that the sales
representatives do not record fictitious new sales? Although the sales team works in different
provinces, ElectroMart ensures that all operations follow the same standards and provide the
same level of customer service, ensuring that customers have a consistent experience across all
provinces. ElectroMart has a 31 December year-end. 2. Salary and commission ElectroMart’s
sales team, made up of the 30 provincial sales representatives, has historically What does the
KPI measure? earned a base salary plus commission, with the commission rate set at 2.5% of all
sales. Approximately 70% of a sales representative’s total compensation comes from their base
salary and the remaining 30% from commissions. However, the company has faced challenges in
generating new business in the past two years. Despite having an established customer base,
ElectroMart has noticed a decline in cold calling1 and sourcing new customers, with 80% of all
commissions now earned from repeat sales to existing customers. Several external factors may
also be contributing to this trend, including reduced consumer spending, rising interest rates,
and job losses in South Africa.
1. Manual Controls
a) Sales Approval Workflows
Require all new customer sales to be approved by a sales manager or regional
supervisor before being recorded.
Managers verify the legitimacy by checking:
o Signed contracts or purchase orders.
(COMPLETE ANSWERS)
2025 - DUE 19
September 2025
[Document subtitle]
[School]
[Course title]
,CAS3701 Assignment 6 (COMPLETE ANSWERS) 2025 - DUE 19 September 2025
Course
Capstone in Accounting Sciences (CAS3701)
Institution
University Of South Africa (Unisa)
Book
Accounting
CAS3701 Assignment 6 (COMPLETE ANSWERS) 2025 - DUE 19 September 2025; 100% TRUSTED
Complete, trusted solutions and explanations.
Background ElectroMart Limited (ElectroMart) is a well-known South African retailer,
specialising in consumer electronics, home appliances, and office supplies. The company
operates nationwide and has recently expanded its operations into neighbouring countries.
ElectroMart serves a broad customer base, ranging from individual consumers to large
corporations. The company's sales team comprises 30 sales representatives, divided equally into
three key provincial areas: Western Cape, Gauteng, and KwaZulu-Natal. These representatives
are Identify and explain four key business risks arising from ElectroMart’s current sales
recording process.
For each risk identified, discuss the potential impact on the business if the risk is not effectively
managed. 6. After introducing the revised compensation plan, what Key Performance Indicators
(KPIs) should ElectroMart’s management monitor to identify early signs of poor performance or
potential risk in the plan? For each KPI, explain what it measures and how it can help
management take corrective action. responsible for managing customer relationships and
promoting ElectroMart’s products in their areas.
What would you do if you were John? Would you report the sale accurately, or would you
misclassify it to meet the quota?
, Discuss the possible implications for John and How could the revised commission structure
increase the risk of material misstatement in Revenue?
Discuss the risk as well as its impact.
6. Assume you are the auditor of ElectroMart. What substantive audit procedures would you
perform to verify that commission expenses are accurately and completely recorded for the
year ended 31 December 2024 ElectroMart. 4.
What manual and computer controls could ElectroMart implement to ensure that the sales
representatives do not record fictitious new sales? Although the sales team works in different
provinces, ElectroMart ensures that all operations follow the same standards and provide the
same level of customer service, ensuring that customers have a consistent experience across all
provinces. ElectroMart has a 31 December year-end. 2. Salary and commission ElectroMart’s
sales team, made up of the 30 provincial sales representatives, has historically What does the
KPI measure? earned a base salary plus commission, with the commission rate set at 2.5% of all
sales. Approximately 70% of a sales representative’s total compensation comes from their base
salary and the remaining 30% from commissions. However, the company has faced challenges in
generating new business in the past two years. Despite having an established customer base,
ElectroMart has noticed a decline in cold calling1 and sourcing new customers, with 80% of all
commissions now earned from repeat sales to existing customers. Several external factors may
also be contributing to this trend, including reduced consumer spending, rising interest rates,
and job losses in South Africa.
1. Manual Controls
a) Sales Approval Workflows
Require all new customer sales to be approved by a sales manager or regional
supervisor before being recorded.
Managers verify the legitimacy by checking:
o Signed contracts or purchase orders.
