CASE:You are auditing sales at Ascot Pty Ltd (Ascot), a manufacturer.When a customer requests merchandise, a sales clerk completes a Sales Order form (in triplicate). The credit manager then reviews this documentation. If the credit manager decides that the customer is an acceptable credit risk, he signs the Sales Order, thus authorising the sale. Sales Orders are distributed for processing as follows: Copy 1 is forwarded to the Receiving Department in the Warehouse; Copy 2 is forwarded to the Invoicing Department; and Copy 3 is returned to the Sales Office where it is filed by date.

REQUIRED:

(i)Outline one test you could perform to determine the effectiveness of the internal control described above. Ensure you identify the evidence source, the evidence used for verification and the audit procedure that is applied.

(ii)Which Statement of Financial Position account and assertion are impacted most by a failure of this internal control?