You have been assigned to audit Johnsons Furniture and Appliance Sales Ltd, an owner managed...
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Accounting
You have been assigned to audit Johnsons Furniture and Appliance Sales Ltd, an owner managed company with two cashiers, two shop assistants and one accounting clerk. These persons do not have job descriptions and alternate to carry out tasks randomly based on customer traffic and if there is staff shortage for any reason. Whilst performing test of controls, many control deviations were found. You therefore concluded that you could not rely on the internal controls.
A. With reference to the above, explain the following principles of internal control: i. Management ii. Arithmetic iii. Organisation iv. Segregation of duties (8 marks)
B. Highlight TWO (2) ways an auditor could document the internal control system. (8 marks)
C. Suggest TWO (2) actions you would take in response to deviations from internal control procedures.
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You can see the logs in the Dashboard.