chain of shops of selling gifts. The company has numerous loyal clients and customers. Half way through the year the directors who are also shareholders decided to close down some of the smaller shops which have not been performing well. They also decided to set up an online business website as to trade through website. Customers can order gifts via the website order form as they will give their credit card details on that form. The goods will be posted to the customers or the gifts recipients.

Customers may log in and order what they require if it is not available in the store. At the same time as the launching of the website, the owners decided that they would offer a mailing service for goods bought in the shops as well. Some of the staffs from the closed shops have been transferred to the warehouse where the electronic arm of the business now operates.

The website is not integrated into the sales ledger. A sales clerk, Anne prints 2 copies of every website request. She checks the order to the availability of stock and then emails the customers if the gifts are going to take more than a week to process. She offers them the chance to change their order if they want. When the item is in stock, she sends one copy of the order to the warehouse where the order is packed and dispatched to the customers. The warehouse manager returns the first copy of the order to another sales clerk, Mimi, marked dispatched. Mimi retrieves the second copy of the order, processes the credit card payment, marks the first order as paid and shreds the second copy of the order. The marked up invoice is filed in a paid invoices file. When there are lots of orders, Mimi helps Anne out and vice versa if lots of orders have been dispatched.

Based on the case study above, you are required to:

a)Discuss THREE (3) business risks in which the company need to face regarding to its e- commerce operations.

b)Describe the audit risks which may have arisen from the decision.

(20 marks)

(15 marks)

c)Suggest THREE (3) amendments to control procedures in order to make operations run smoothly.

(15 marks)