1. Describe how are tests of controls are related to the evaluation of control risk? [10 marks]

2. You are the Audit manager on the audit of the University of Eastern Sydney (UES). UESs accounting IT system for accounts payable includes supplier information which is contained in a supplier master file (SMF). Each supplier has a unique supplier code. You have discussed the purchasing system with UESs purchasing clerk who has advised that the internal control to prevent unauthorised transactions is that when attempts are made to place an order from a supplier not in the SMF, the order cannot be processed, unless the supplier has been approved by the Purchasing Manager.

One of the audit team has advised you, that while they were reviewing the processing of purchase orders, they observed the purchasing clerk accessing to the Purchasing Managers password, which allows the clerk to allocate a supplier code to new suppliers.

Required

Explain what type of control the above information describes. Discuss its strengths and weaknesses. [10 marks]