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2.What are the principles of Internal control? 3. What does the term incompatible functions mean? How is segregation of incompatible functions achleved? 4.Why does an
2.What are the principles of Internal control? 3. What does the term incompatible functions mean? How is segregation of incompatible functions achleved? 4.Why does an auditor in a financial statement audit need to obtain an understanding of internal Control? 5. The auditor of the Salesarywhere Group of companies has been asked to investigate the cash salcs pystem of OHice Stationery company, one of its subsidiaries. The Othce Stationery sells office supolies in the Melbourne area. Its prices are highly competive and it olfers a sume-dia delivery service for orders telephoned before eleven o'clock its costs are locpt down by requiring cash on de very. Salas, aremade in the following way: 1. The customer phones through their order to the sales department, which then mises a prenumbered multiple copy sales order and two of these (the involce copirst are priced mond totalied. 2. The dispatch department makes up the order and gives the goods straight to the crlver witi thethvoice copies of the order. 3. The deiver delivers the goods. collects the cash and receipts the customer's copy of the invoice. 4. The driver returns and hands over the carh and the second copy of the irvoico to the castlice. 5. The cashiee then records and banks the cash. Requilied Lildentify any weabinestes in the cash sales system. BDescribe any auctir tests you would perform to ensure that there was no materlal error cur fraud within the aystern
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