AUI3702 ASSIGNMENT 2 SOLUTIONS 2022 SEMESTER 2
QUESTION 1
Komes Ltd, a medium-sized retailer of solar lights, has implemented the following control
activities to mitigate the risks they face in the various business cycles:
a) To gain access to the warehouse, warehouse employees must place their thumb on a
biometric reader. If the thumbprint is authorised, the turnstile is activated to gain access to the
warehouse.
b) Inventory cycle counts are conducted on different sections of the warehouse at the end of
every month.
c) To process monthly payments to creditors by electronic funds transfer, both the financial
accountant and the financial director must enter their unique passwords before the payment
will be transferred.
d) The purchase application software will not produce a purchase order unless the order is made
out to a supplier on the approved supplier masterfile.
REQUIRED
Compile the risk that is mitigated by each of the above control activities (a-d). (6)
Solution
a) The risk that unauthorised personnel might have access to the warehouse
b) The risk that theft of inventory might go undetected
c) The risk that unauthorised personnel other than the financial accountant and the
financial director might process monthly payments to creditors by electronic funds transfer
d) The risk that orders might be processed for unapproved suppliers
QUESTION 2
QUESTION 1
Komes Ltd, a medium-sized retailer of solar lights, has implemented the following control
activities to mitigate the risks they face in the various business cycles:
a) To gain access to the warehouse, warehouse employees must place their thumb on a
biometric reader. If the thumbprint is authorised, the turnstile is activated to gain access to the
warehouse.
b) Inventory cycle counts are conducted on different sections of the warehouse at the end of
every month.
c) To process monthly payments to creditors by electronic funds transfer, both the financial
accountant and the financial director must enter their unique passwords before the payment
will be transferred.
d) The purchase application software will not produce a purchase order unless the order is made
out to a supplier on the approved supplier masterfile.
REQUIRED
Compile the risk that is mitigated by each of the above control activities (a-d). (6)
Solution
a) The risk that unauthorised personnel might have access to the warehouse
b) The risk that theft of inventory might go undetected
c) The risk that unauthorised personnel other than the financial accountant and the
financial director might process monthly payments to creditors by electronic funds transfer
d) The risk that orders might be processed for unapproved suppliers
QUESTION 2
