MSc. ACCOUNTING AND FINANCE MFA 557: INTERNATIONAL AUDITING & ASSURANCE ASSIGNMENT ONE - 40 Marks Question 1 Jonathan is the sole shareholder of Furry Lion Stores, a company which owns five stores in the west of England. The stores sell mainly food and groceries. Each store is run by a full time manager and three or four part-time assistants. Jonathan spends on average half a day week at each store, and spends the rest of his time at home, dealing with his other business interests. All sales are cash and recorded on till rolls which the manager retains. Shop managers' wages are paid monthly by cheque by Jonathan. Wages of shop assistants are paid in cash out of the takings. Most purchases are made from local wholesalers and are paid for in cash out of the takings. Large purchases (over 2,500.00 GHC) must be made by cheques signed by the shop manager and countersigned by Jonathan. Shop mangers bank surplus cash once a week, apart from a float in the till. All accounting records including the cash book, wages and sales tax records are maintained by the manager. Jonathan reviews the weekly bank statements when he visits the shops. He also has a look at the inventory to see if inventory levels appear to be about right. All invoices are also kept in a drawer by a manager and marked with a cash book reference, and where appropriate a cheque number when paid. Required Discuss the deficiencies in the control systems (Inventory, cash, bank, reconciliation, purchases, supervision etc.) of Furry Lion Stores, and how the weaknesses can be remedied