existing sales data for credit sales in the financial year just ended the following data has been Truly Legit is implementing a new credit sales approval system. Based on an analysis of their obtained. The sales and warehouse of Truly Legit, a retail company, operates as follows and is currently under review: Transaction value $1-$500 $501-$1000 $1001-$2500 >$2500 TOTAL . Total value $357 950 $455 845 $287 675 $180 000 $1281470 . Number of transactions. 1431 585 145 60 2221 Risk Sales to customers who have exceeded their credit limit Large transactions taking place without proper approval Fraudulent sales of low value entering the system The current system has a standard sales process whereby the sales person provides the approval and authorisation for goods to be released by signing a sales order, a copy of which goes to documents are prepared on computer by the salesperson, printed out and sent via internal mail the warehouse and serves the dual purpose of a picking ticket and shipping authorisation. The at the end of the day to the warehouse. If a new customer comes in off the street, then the sales person adds them to the system immediately and gives them the default credit limit of $750. Customer credit limits are not checked unless the customer name appears on a credit warning list, which is produced by the accounts receivable division at the start of each month. All sales follow this process. Goods being shipped without proper authorisation Sales orders going missing between sales person and warehouse Customers' records containing nonexistent customers % of sales 27.9 The stages of the COSO framework, as they apply to Truly Legit, are: control environment: The board of directors is constantly receiving feedback from the various functional divisions about their performance and meeting of targets. Additionally, the board places great emphasis on corporate governance and has held numerous organisation-wide workshops and training sessions for middle-level management to reinforce the importance of proper governance and control. The board also has an audit committee, who monitor internal control functionality, which is comprised wholly of non-executive directors. risk assessment: Management is concerned about the following risks in the sales process. control activities information and communication monitoring 35.6 22.5 14.0 100.0 Required the sales process to overcome the risks involved. (a) Using the COSO framework, derive control activities that could be implemented within (b) For each control activity that you identified in (a), identify the information a communication necessary as well as how monitoring can occur to assess the process and performance.