McJuno Limited (MJ) operates a chain of 70 fast food shops in Hong Kong. To enhance customer satisfaction and operational efficiency, MJ is planning to launch a mobile app, MJ Mobile App. The basic features of the mobile app are described as follows.

Membership registration
Customers download MJ Mobile App and use the app to create customer log-in accounts. Customers can register their memberships by filling in online application forms through the App. A unique membership number together with a unique QR code would be assigned to each registered member. Personal information gathered from the online application forms (including name, date-of-birth, telephone number, address, etc) would be stored in MJ’s centralized database which can be assessed by all staff in all MJ’s fast food shops.

Making a purchase
Members can select their food by using the online menu in the App. After selection, members can place order through the App and pick up their food at the selected outlets. Payment can be made online through credit cards or other electronic wallets. Members can also choose to pay in cashier counters when they pick up their food.

Members can also enjoy other promotional items, like receiving e-coupons. Promotional information would be communicated to members through MJ Mobile App.

Required:
(a) Assuming you are the senior associate responsible for MJ’s audit, your audit manager is going to have a meeting with MJ’s management to discuss the proposed IT system of MJ Mobile App. Prepare a note for your audit manager regarding the two issues below:
(i) identify and discuss the IT risks arising from MJ Mobile App system, and
(ii) propose some control features that should be implemented in MJ so that the IT risk can be reduced.

(b) After the design, development and testing of MJ Mobile App system, MJ has to convert its existing sales system to the new MJ Mobile App system. Among the four system conversion approaches, which one will you suggest MJ to adopt? Provide reasons to support your suggestion. (4 marks)

(c) With respect to the coming audit of MJ's financial statements,
(i) determine and explain the impact of the system conversion on the audit planning and
(ii) suggest some appropriate audit procedures on the system conversion.