AUDITING

al Describe Two methods for documenting the sales system, and for each explain ONE advantage d ONE disadvantage of using this method thy Identity and explain SEVEN deficiencies in the sales system of Heraklion Cound provide a recommendation to address each of these deficiencies. Note Prepare your answer using two columns headed Control deficiency and Control recommendation respectively te) in relation to the payroll fraid, identity and explain THREE controls Heraklion Co should implement to reduce the risk of this type of fraud occurring again and, for each control, describe how it would mitigate the risk d) Describe substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to Heraklion Co's revenue. (15 marlis) QUESTION 2 Raspberry Co operates an electric power station, which produces electricity 24 hours a day, seven days a week. The company's year end is 30 June 20X8. You are an audit manager of Grapefruit & Co, the auditor of Raspberry Co. The interim audit has been completed and you are revicuing the documentation describing Raspberry Co's payroll system. Systems notes - payroll Raspberry Co employs over 250 people and approximately 70% of the employees work in production at the power station. There are three shifts every day with employees working eight hours each. The production employees are paid weekly in cash. The remaining 30% of employees work at the head office in non-production roles and are paid monthly by bank The company has a human resources (HR) depurtment responsible for setting up all new joiners. Pre-printed forms are completed by HR for all new employees and once verified, a copy is seni to the payroll department for the employee to be set up for payment. This form includes the staff member s employee number and payroll cannot set up new joiners without this information. To encourage staff to attend work on time for all shifts, Raspberry Co introduced a discretionary onus, paid every three months for production staff The production supervisors determine the mounts to be paid and notity the payroll department. This quarterly bonus is entered into the stem by a clerk and each entry is checked by a senior clerk for input errors prior to processing die senior clerksins the bonus listing as evidence of undertaking this review, duction employees are issued with clock cards and are required to swipe their cards at the ginning and end of their shift. This process is supervised by security staff 24 hours a day. Each al Describe Two methods for documenting the sales system, and for each explain ONE advantage d ONE disadvantage of using this method thy Identity and explain SEVEN deficiencies in the sales system of Heraklion Cound provide a recommendation to address each of these deficiencies. Note Prepare your answer using two columns headed Control deficiency and Control recommendation respectively te) in relation to the payroll fraid, identity and explain THREE controls Heraklion Co should implement to reduce the risk of this type of fraud occurring again and, for each control, describe how it would mitigate the risk d) Describe substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to Heraklion Co's revenue. (15 marlis) QUESTION 2 Raspberry Co operates an electric power station, which produces electricity 24 hours a day, seven days a week. The company's year end is 30 June 20X8. You are an audit manager of Grapefruit & Co, the auditor of Raspberry Co. The interim audit has been completed and you are revicuing the documentation describing Raspberry Co's payroll system. Systems notes - payroll Raspberry Co employs over 250 people and approximately 70% of the employees work in production at the power station. There are three shifts every day with employees working eight hours each. The production employees are paid weekly in cash. The remaining 30% of employees work at the head office in non-production roles and are paid monthly by bank The company has a human resources (HR) depurtment responsible for setting up all new joiners. Pre-printed forms are completed by HR for all new employees and once verified, a copy is seni to the payroll department for the employee to be set up for payment. This form includes the staff member s employee number and payroll cannot set up new joiners without this information. To encourage staff to attend work on time for all shifts, Raspberry Co introduced a discretionary onus, paid every three months for production staff The production supervisors determine the mounts to be paid and notity the payroll department. This quarterly bonus is entered into the stem by a clerk and each entry is checked by a senior clerk for input errors prior to processing die senior clerksins the bonus listing as evidence of undertaking this review, duction employees are issued with clock cards and are required to swipe their cards at the ginning and end of their shift. This process is supervised by security staff 24 hours a day. Each