2 10 points SAVE ANDHER You are the audit manager working at Boughen Whiting on the audit of Acuity Resorts Pty Ltd for the year ending 30 June 2022. Acuity operates luxury resorts in Cairns and Port Douglas, Far North Queensland. All resorts also include high-end restaurants which are operated by a related party, Wockpool Pty Limited. You reviewed the work undertaken by Harry Baker, the junior auditor, during the first visit, which included the two (2) tests of controls detailed below: 1. To test whether only authorised personnel can access the payroll data in the accounting system, Harry attempted to access the payroll data himself using the logins of six different non-payroll staff in the accounting department. Harry was able to access and amend the payroll data successfully on three of these six login attempts. As a result, Harry concluded that the internal controls were not working. Therefore, a fully substantive audit approach should be adopted for auditing the employee-related expense and provision accounts. 2. To test whether payments made to related parties were approved and signed off by the CFO as required, Harry selected a sample of 18 payments made to related parties and traced them back to the electronic funds transfer (EFT) form to sight the CFO's signature of approval. 12 payments out of the sample had been approved by the CFO in writing. The other six EFT forms did not contain the CFO's signature but had a notation that the CFO had given verbal approval. As the six EFT forms not containing the CFO's signature were for immaterial amounts, Harry concluded that the internal controls were working satisfactorily. Therefore, analytical procedures rather than substantive tests of details could be used in auditing payments made to related parties. payments made te Required: ated parties a in relation to each of the two (2) tests c control carried out at the first visit Indicate whether Harry has arrived at the correct conclusion Justify your answer. (4 marks) i. Describe the impact that the test results would have on your other audit procedures (3 marks) b. With reference to a relevant standard, briefly explain what is meant by 'sufficient appropriate audit evidence and outline four (4) factors that affect the reliability of audit evidence. (4 marks) In the answer box below, write the letter and your answer. e.g. a. Your answer t For a. consider using the following table format to provide your answers: Test of control 1. 2 Harry's conclusion Justification Impact on other procedures To create a table in your answer, click on the table icon in the edit menu bar. If the second row of icons is not present click on the 3 dots at the end of the first row to open the next row of icons