Q1) Which of the following is NOT a concern of the expenditure cycle?

a. Only verified and high-quality suppliers are selected for purchases.

b. Payments match supplier invoice, purchase order and delivery docket.

c. Payments to suppliers are made by authorised employees

d. There are sufficient goods in the finished goods inventory to fulfil the customers order.

Q2) AtoZRetail is a small organisation where it is not possible to completely segregate incompatible duties. Within the sales process of AtoZRetail Ltd, which one of these combinations would form the LEAST acceptable combination of duties?

a. A sales clerk is in charge of approving new cash customers and processing new sales orders.

b. A sales clerk is in charge of processing sales orders and maintaining the sales ledger.

c. A sales clerk is in charge of processing sales orders and changing unit prices within certain limits.

d. A sales clerk is in charge of processing sales orders and approving customer credit limits.

Q3) Jannie is an assistant payroll staff at HomesCo Ltd. She is aware of the limited controls around the payroll system in her organization. Jannie can create a fictitious employee, timesheets and approve them as long as it is under the standard 40 hours per week and at the standard hourly rate of $20. Which control would be most likely to minimize potential fraud arising from this situation?

a. A good audit trail

b. Segregation of duties

c. Physical protection of assets

d. Personal policies and practices

Q4) Which of the following controls can be applied to minimise the risk of under or over estimating revenue and expenditure amounts?

a. Independent approval of budget estimates.

b. Ask operational managers to prepare budget estimates.

c. Link budget values to performance monitoring.

d. All of the options are correct.