Question 19 Starlight Wholesalers Ltd (Starlight) is a manufacturer of branded sneakers for retail stores. The following are the steps Starlight follows for the receipt of all goods ordered.

Goods ordered are delivered in cargo containers that display the item code and quantity on the outside of the container, and accompanied by the supplier delivery note indicating the description and quantity of goods. When a delivery of goods arrives, the security guard opens the gate and directs the driver to the receiving area, which is attached to the warehouse.

Which one of the following alternatives describes the main security risk that can be identified from the above-mentioned steps Starlight follows for the receipt of goods ordered?

Select one:

a.

The goods are delivered in cargo containers so they cannot be viewed.

b.

The receiving area is not separate from the warehouse.

c.

The supplier delivery note may not agree to the goods delivered.

d.

Entry to the premises is not controlled/maintained using a register.

Question 21 The chief audit executives appointment should, in terms of the King IV Report on Governance, be approved by the

Select one:

a.

chairman, provided he is an independent non-executive director.

b.

board of directors.

c.

shareholders.

d.

audit committee.

Question 22 Describe at what value inventory should be presented in the financial statements.

Select one:

a.

At the lower of cost and estimated selling price

b.

At the higher of cost and net realisable value

c.

At the lower of cost and net realisable value

d.

At the lower of weighted average and net realisable value

Question 25

In order for a non-executive director to be classified as independent he/she must satisfy a number of requirements.

Which ONE of the following is an applicable requirement?

Select one:

a.

He/she was the senior external audit manager during the audit performed for the last financial year.

b.

At no stage should he/she have been the CEO of the company.

c.

He/she is a significant professional advisor to the company.

d.

He/she must not receive remuneration that is based on the companys profits for the financial year.

Question 26 Who is ultimately responsible for ensuring that the company complies with the applicable laws and regulations?

Select one:

a.

the risk committee

b.

the governing body

c.

the audit committee

d.

all the personnel of the company

Question 27 Puma service station makes electronic funds transfers to pay their suppliers. The following is a procedure in the system description of supplier payments.

Upon accessing the supplier payment module, Ms Bonga, the creditors clerk, will access the supplier account which will list the outstanding invoices. The most recent invoice are reflected first. Ms Bonga does not perform a supplier statement reconciliation each time payments are made.

Which one of the following alternatives best describes the major risk that can be identified in the above step in the preparation of payments and the payments made to suppliers?

Select one:

a.

Payment of fictitious payments and discount lost owing to late payment.

b.

Unauthorised payments can be made and discount can be lost owing to late payment.

c.

Unauthorised payments can be made and payment of incorrect amounts can occur.

d.

Payment of incorrect amounts and fictitious payments.