HTB Clothing is a manufacturing company who manufacture clothes for women. HTB Clothing buys the material from a specific supplier and has a February year end.

Staff are situated in different locations and work in different departments, namely, manufacturing, accounting, IT department, admin and the sales department.

The company uses an integrated software package for their inventory, purchases, accounts receivable and accounts payable.

You work for HTB Clothings audit firm. When you and your team had the first audit meeting for the year, you were made aware of the following:

1. They recently decided to introduce a website. This will make online shopping via the internet available to the public.

2. The company started using social media from December 2020, as a platform to advertise their company and products to a bigger audience.

3. When the wages per month are done, the Masterfile gets updated. The staff in the manufacturing department gets paid very two weeks. They use a clock card system. Below an extract from the wages Masterfile

Staff Number	Name & surname	Location	Normal hours worked	Overtime hours works	Total hours	Rate per hour	Total wages
UNI01	lee milton	WH 1	140	24	164	56	9184
UNI02	Chantel	WH2	170	12	183

Batch Input System

The Financial Manager gave you a full system description of the batch input system. See below:

Order

Orders are mailed by clients to the Head Office. The order from is a preprinted form, that was sent to all HTB Clothings authorised clients.

Orders received by mail are on a daily basis picked up by an order clerk and taken to the Credit Manager. The Credit Manager then reviews the clients credit limit and current balance and then authorises the transaction by signing the order form. Distribution and invoicing

The authorised order forms are then sent to the distribution department where it is then entered into the computer system.

The computer automatically generates a pre-numbered delivery note in triplicate, and it is then handled as follows: o One copy is filed together with the order form o Two copies accompanies the delivery and are signed by the client. One copy is then retained by the client and the other one returned to the Head Office

. Every third day all the signed and returned delivery notes are handed over to the debtors clerk whom then enters the last three days delivery notes as a batch into the computer system. The computer then generates invoices from the information that was entered

. Only one hard copy of the invoice is printed and then sent to the client, while an electronic copy of the invoice is kept by HTB Clothing. Processing and input

All inputs are processed every third evening at 24:00 (midnight).

Wages Cycle HTB Clothing has a workforce of approximately 120 hourly paid employees. Hours worked are recorded using a conventional clock card and clocking device system, but the preparation of the payroll is computerised and wages are paid by EFT. Wages are paid every two weeks. At the conclusion of the wage period, the Administration Clerk carries out various control procedures on the clock cards for the preceding two weeks, batches them, and takes them to the wage clerk himself, for entry into the system. Hourly paid employees at HTB Clothings hours worked are recorded on the clock cards automatically by the clocking device system. Each employees hours are then entered onto the system by the wage clerk. Required

: 3.1 Suggest how the system concerning the entry of batches of delivery notes should be controlled to ensure that inputs are accurate and complete. (14 marks)

3.2 Briefly describe six programme (automated) controls that will contribute to ensuring that hours are entered by the wage clerk for only valid employees, and that hours entered are accurate and complete. (14 marks)

3.3 Based on point 3, identify the CAATs you would use to ensure all wage calculations are correct and that the correct wages are paid over. List and explain the CAATs you will use.