Cheerful Charlies Chocolate Chews has a receiving dock at its location in Chelsea. When goods (mainly cocoa beans and sugar) are received, the receiving clerk promptly weighs the incoming goods and prepares a receiving report. The goods are forwarded to the warehouse and a copy of receiving report is sent to the accounts payable clerk. The payables clerk matches the receiving report to the companys purchase order and the vendors invoice (i.e., a three-way match is performed). The receipt of the goods and the related payable is recorded when the goods are withdrawn from the warehouse and put into production.

Please indicate and discuss the following:

a. Whether the control activity is well-designed (be sure in your first answer to demonstrate your understanding of what a good control procedure design means from a financial statement auditors perspective).

b. Whether you would perform tests of controls on the control activity (Be sure in your first answer to demonstrate your understanding of the objective of tests of controls)

c. The accounts and assertions to which the control relates.