Refer to the internal control questionnaire (Appendix 13A, Exhibit 13A€“1), and assume the answer to each question is €œno.€ Prepare a table matching questions to errors that could occur because of the absence of the control. Your column headings should be:
Question ........ Possible Error or Fraud Due toWeakness

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EXHIBIT 13A-1 Internal Control Questionnaire: Production and Payroll Processes INTERNAL CONTROL QUESTIONNAIRE FOR PRODUCTION PROCESS FILE INDEX -55/ AUDITEE FINANCIAL STATEMENT PERIOD: PROCESS: Invento OVERALL COMPANY-LEVEL CONTROL AND CONTROL ACTIVITIES ASSESSMENT Refer to responses recorded for questions in Exhibit 9A-1 in Appendix 9A) APPLICATION CONTROL ASSESSMENTS PRODUCTION APPLICATION CONTROLS Environment and general controls relevant to this application duction costing Auditor Audit File Responses Reterences 1. Are access controls properly designed to restrict access to production initiation documents and functions to authorized personnel? Consider production system user identity assignments, access to blank production order forms, materials and labour requisitions forms, and finished goods inventory issue forms. 2. Are physical access controls in place to ensure only authorized personnel have custody of materials, work in progress, and finished goods? 3. Is production cost accounting segregated from factory production functions? Application Control Assessments: Consider whether the auditee has appropriate policies and Validity objective s in place to meet the following control objectives: 4. Are material requisitions and job time tickets reviewed by the production supervisor after factory personnel prepares them? 5. Are the weekly direct labour and materials-used reports reviewed by the production supervisor after factory personnel prepares them? Completeness objective 6. Are production orders, materials and labour requisitions, job time tickets and inventory issue slips prenumbered and the numerical sequence checked for missing documents? Authorization objective 7. Are authorizations of production orders and materials and labour requisitions independently verified? Accuracy objective: 8. Are differences between inventory issue slips and materials-used reports recorded and reported to the cost accounting supervisor? 9. Are differences between job time tickets and the labour report recorded and reported to the cost accounting supervisor? 10. Are standard costs used? If so, are they reviewed and revised periodically? 11. Are differences between reports of units completed and finished goods entries recorded and reported to the cost accounting supervisor? Classification objective 12. Does the accounting manual give instructions for proper classification of cost accounting transactions? Accounting objective 13. Are summary journal entries reviewed and approved by an accounting supervisor? Proper period objective 14. Does the accounting manual give instructions to date cost entries on the date of use? Does an accounting SU r review monthl uarterly, and vear-end cost accruals? Auditor's conclusion on the effectiveness of application controls in the production process: Prepared by Date