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Question 4 (30 marks) During the audit of Fashion Street Ltd, Jeannette was tasked to audit the purchase and payment section of the company. Jeannette

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Question 4 (30 marks) During the audit of Fashion Street Ltd, Jeannette was tasked to audit the purchase and payment section of the company. Jeannette interviewed the accountant and obtained an understanding of the following purchasing and payment processes of the company: Purchases Whenever a department is running low on inventory, the department staff will raise and approve a purchase requisition form. These forms will then be used to raise a randomly numbered purchase order by the purchasing manager. A copy of each purchase order is sent to the accounting department and the requesting department, respectively. When the goods are delivered to the warehouse, the department staff will check on the goods received based on the copy of the purchase order. When the department staff confirmed that the items are in order, a sequentially pre-numbered goods received note (GRN) is generated by the warehouse personnel and sent to the accounting department Payments When the supplier's invoice is received by the accounting department, the accounts executive will match the invoice to the respective GRN before preparing the cheque payment. The accountant will then approve the cheque payment and send it out himself at the end of the day. Required: With regards to the controls exercised over the purchases and payables system of Fashion Street Ltd: (a) Identify and explain any FOUR (4) control weaknesses in Fashion Street Ltd's purchases and payment process. (12 marks) (b) For each of the control weaknesses identified in (a) above, provide a recommendation to improve on the weakness. (8 marks) (You should use a TWO (2) column format using the headings "Weakness and *Recommendation'.) (c) Discuss FIVE (5) objectives of internal controls that should be exercised over a purchases and payables system. (10 marks)

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