Internal Auditing

Question one The following situations below are independent scenarios which will require separate responses for each scenarios. A different response will be require for each of the situations even though the issues might be interrelated. (i) Andre Roper is the accounts payable supervisor a Trades and Trades Limited. He reports to an Accounting Manager. Roper is in charge of billing customers, approving credits and authorizing bad debts as well as maintaining supplier balances, posting invoices and reconciling the bank. (ii) Nardia Green is an Accountant at Zimmer Limited. She is in charge of writing cheques for the signature of the entity's financial controller. After the cheques are signed, they are locked in a vault in the office of Karen whose task is to solely distribute cheques to suppliers. Nardia is also responsible to post invoices, applying cheque payments to suppliers' accounts after which the bank balances are reconciled by Cornel, the entity's financial controller. (iii) Carla Smart works at Smart Unlimited as a payroll supervisor for the last three years. Her tasks involved adding persons to the payroll software on the receipts of the copy of the employees' contracts and a letter from the Human Resource department. On the receipt of a copy of employees termination and redundancy letter, she then removes employees from the payroll register. She also adjust rate changes after receiving a copy of the promotion letter from the HR department. (iv) Kevin Hall is the inventory controller at St. James Enterprise. He handles the issue and receipts of inventory. On the receipt of invoices from suppliers, he then debits the inventory supplies account under current assets, which effectively adjust the inventory balance in QuickBooks. On a monthly basis, he conducts inventory counts and write off all damaged and spoilt inventory items. Required: a. Identify the weaknesses in each of the scenarios above. [12 marks] b. Indicate the significance of management philosophy in strengthening the internal control process. |3marks| c. Highlight the importance of the audit committee's role in strengthening the internal control process in modern organizations. [5marks|