QUESTION 2 (45 MARKS) You are employed as an Audit Senior at XYZ Auditors. XYZ Auditors is a medium-sized audit and accounting firm. Upon completion of your CA (SA) qualification, you furthered your studies and obtained a Certificate in Computer Science. Background Information You have been assigned to the audit of Cowell Ltd (Cowell) for the 2022 year-end, specifically to assist with all IT-related matters. Cowell is one of South Africas biggest retailers who trades with clothing and beauty products. The company has stores located nationwide where customers can do in-store purchases. Cowell has been listed on the JSE since 2016. Internet Sales Cowell is planning to launch its internet shopping platform in June 2022. This will provide customers with the opportunity to shop online from their homes and have their products delivered to their front door. Management is of the opinion that revenue from internet platform sales will increase their revenue by at least 15%. Firstly, customers should register as new customers on the website. Each new customer should complete a customer profile, with a unique username and password. The customer can select his/her own password which should be 8 characters long and should contain both numeric and alpha-numeric characters. All new customers are required to complete particular fields with personal information such as their name, surname, identification number, cell phone number, e-mail address, and physical address for deliveries. These fields are mandatory and registration cannot be completed without these required fields. Placement of orders Once the customers profile is completed, the customer will be able to log into Cowells website to browse through the catalogues. The catalogues show a picture of each of the available products as well as their online price. The customer can then select a number of products and add them to the online shopping cart. 6 HCGA232-1-Jul-Dec2022-SA1-MS-V2-27052022 After all the required products have been selected the customer clicks on the checkout button. Once the customer checked out, he/she is required to review the products selected, the quantity selected, the price per product, the total amount owing, and the delivery address. The customer then confirms that the order is correct by clicking on the confirmation box which automatically takes the customer to Cowells secure payment website. The customer then has to complete his/her credit card details such as initials, surname, card number, CVV number (last three digits on the back of the card), and the expiry date of the credit card. A confirmation e-mail with the customers invoice is sent to the registered e-mail address. All invoice numbers are sequentially logged. Before delivery, the system confirms with the bank the customers available balance and that the credit card is not stolen or fraudulent. Cowell is directly linked, via Electronic Data Interchange (EDI), to all the South African Banks. Once the balance has been confirmed with the bank, the products will be delivered. If insufficient funds are available, the products will not be delivered and the customer will be informed thereof via e-mail. Delivery of the product Upon delivery, the customer is required to review the products and quantities ordered and acknowledge receipt thereof by signing the delivery note. The transaction will then be recorded in the accounting records as the payment is transferred immediately when the online purchase is made. The Debtors Clerk reconciles the amount received from the bank with the invoice e-mailed to the customer and the amount recorded in the general ledger as well as follow up on any identified differences. General Cowell uses the latest technology in its encryption techniques as well as firewalls. Logs of unauthorised access attempts and missing numbers in the sequence of invoice numbers are generated and reviewed by Mr. Clarke, the IT Manager. 7 HCGA232-1-Jul-Dec2022-SA1-MS-V2-27052022 Required: 2.1 Identify all the general and application controls that Cowell Ltd is going to implement to ensure the occurrence of revenue from internet sales. (10 marks) 2.2 Discuss the business risks that Cowell Ltd will be exposed to from the sale of their products via the internet. (20 marks) 2.3 Provide the specific application controls that is currently not present but should be present in the online internet system when customers place an order. (15 marks)