QUESTION ONE $[40]$Your firm was recently appointed as the external auditors of SmartDesign $($Pty$)$ Limited, acompany which does project designs for construction companies across Southern Africa.The company was started $20$ years ago by Mr J Waterbrook who is the current CEO andmajority shareholder. The company has a board of directors with other executive directorsincluding the finance, production, marketing and human resources directors.As part of your understanding of the entity phase of the audit you were instructed by youraudit manager to perform an evaluation of the general controls at SmartDesign as part ofyour interim audit ahead of the year end audit for the financial year ended $31$ December$2021.$ You have performed inquiries with management from multiple departments andobtained and inspected policies implemented at SmartDesign and noted the following:$1)$ The companys IT department consists of $5$ employees all of whom have a strongunderstanding of IT including knowledge of system development and programming$\mathrm{.}2)$ Up until April $2021$ the IT department was led by Mr Aaron Keys but he had decidedthat his time at SmartDesign had come to an end and pursued another career as anIT Director for a large corporation. When he joined SmartDesign, Mr Keys hadinvested a lot of time developing the accounting system and implementing varioussoftware modules for other financial reporting cycles. He had autonomy for thecompanys network and had absolute control over all matters relating to IT$.$ As hehad taken the system documents when he left the company, he had agreed thatshould SmartDesign require upgrades or require troubleshooting he would makehimself available after working hours to assist in resolving these issues or upgradingthe system$\mathrm{.}3)$ As a result of this arrangement, SmartDesign decided not to find a replacement forMr Keys as he would be around to assist SmartDesign for the future. SmartDesigndid hire an additional IT staff member once Mr Keys left in April. The appointmentwas done by the other $4$ IT staff members with the instruction from Mr Olive $($thecompany accountant$)$ who advised them that they should hire someone they arefamiliar with and someone who they trust. Since there is no longer a head of the ITdepartment the rest of the IT staff report to the production director and to Mr Olive.Both these individuals have a basic understanding of the different systems howeverthere is no in depth knowledge of how the financial and operating modules linktogether with the various cycles implemented.Although the four IT staff report to the production director and Mr Olive, they are notclosely supervised by either of them resulting in the IT staff generally managing theirown time and activities. The CEO does not pay much attention to the companys ITneeds as he is generally swamped trying to create more business for SmartDesign$\mathrm{.}4)$ As indicated above, SmartDesign runs its own accounting cycles on a local areanetwork. All employees who need to be on the network to fulfil their functions eachhave their own desktop computer. In addition there are a number of desktops on thenetwork located in a large general office space along with the networks servers andprinters. This general office is not access controlled as staff members must be ableto collect printed documents as required. All employees have access to the generaloffice desktops so they can send emails and use it for their personal purposes duringlunch breaks$5)$ Access to the network is controlled by the use of user identification and passwords.Employees are required to enter their departments general password to gain accessto the applications used by their department. Once the employee has accessed theapplication a further password may be required for some of the modules within theapplication.Discuss in detail, the weaknesses in the general controls at SmartDesign based on theinformation provided