Jimmy Choo Sdn Bhd is a Malaysian based manufacturer of a popular range of leather shoes. The Company has historically sold its products directly to consumers through its retail stores. Due to competitive pressures, the Company installed an Internet based sales system that allows customers to place orders through the Website. The Company hired an external Website design consultant to create the sales system because the companys IT personnel lacked the necessary experience. Customers use the link to the product listing on the Website to view product description and prices. The product listing is updated weekly.

To get the system online quickly, management decided not to link the order system to the sales and inventory accounting systems. Customers submit orders for products through the online system and provide their credit card information for payment. Each day, accounting department clerks print submitted orders from the online system. After credit authorisation is verified with the credit card agency, the accounting department enters the sale in the sales journal. The accounting department then sends a copy of the order to the warehouse personnel who process the shipment. The inventory system is updated based on bills of lading information forwarded to accounting after shipment. Customers may return the products for full refund if returned within 30 days of submitting the order online. The Company agrees to refund shipping costs incurred by the customer for returned goods.

Required:

(a) Critically describe any deficiencies in Jimmy Choo Sdn Bhds online sales system that may lead to material misstatements in the financial statements. (10 marks)

(b) Identify changes in manual procedures that could be made to minimise risks, without having to reprogram the current online system. (7 marks)

(c) Critically discuss customer concerns about doing business online with Jimmy Choo Sdn Bhd and the types of controls which could be implemented to address those concerns. (8 marks)