Consider the following control weaknesses revealed by your tests of controls on a publicly held U.S. mail-order computer peripheral retailing company.

a. Clerks do not compare daily sales orders to credit limits until after the day's business has been transacted and the orders shipped.

b. Warehouse workers make direct entries into the inventory accounting system.

c. Open sales orders are not reviewed periodicaily.

d. Checks written require only an assistant treasurer's signature.

e. Copies of receiving reports are often not given to the accounting clerks until a week has passed.

f. Sales return documents are not prenumbered.

g. Neither control totals or hash totals are kept by the clerks who post to the general ledgers.

For each of these control weaknesses (considered independently),

a. What risk exposures result from the lack of control?

b. What types of misstatements may occur as a result of the weakness?

c. What information is necessary to distinguish whether the control weakness constitutes a significant deficiency or material weakness?

d. What is the impact on the audit if management's assessment of internal control identified these weaknesses versus if the auditors are the first to identify them?