1) Explain the two levels of a system of internal controls. Will the auditor test both levels? Explain your answer?

2) Provide an example of application controls for managing sales invoices? Suggest one test of control that can be used to test the control suggested? 

 

3) For purchasing inventory, to ensure payments will only be made at the correct amount and for goods that are received:

i) Provide one example for preventive control and one example for detective control for the purpose.   

ii) For each control, suggest and explain ONE audit technique that can test it.