The following are misstatements that have occured in Merry Accessories Ltd., a trading company selling handbags and accessories:

1. The order clerk placed purchase orders for accessories items; however, it was discovered that only purchase orders above $3000 required authorization. The order clerk regularly placed order for personal goods up to value of $3000.

2. When goods were received, the warehouse department verified the quantity to the suppliers despatch note and checked the quality of the goods received. The warehouse department, however, did not check against the purchase order as no copy of the purchase order was ever sent to the warehouse department. It was discovered that three batches of handbags, which the company did not order, were received and subsequently paidfor.

3. Purchase invoices were input daily by the purchase ledger clerk. No application control was ever applied over the input process. It was discovered that several mistakes were made during the input process and suppliers were paid incorrectly.

4. The finance director is only provided with the total amount of payments to be made on the payment list for payment approval. It was then discovered that some of the payees were fictitious suppliers.

5. The sales ledger clerk was having a long holiday during Christmas times. Upon return in January, the clerk entered all the unrecorded sales during his leave as January's sales for convenience sake.

6. During the sales ledger clerk's holiday, one of salespersons, a close friend of the sales ledger clerk, helped inputting the sales to the accounting system. It was than discovered that two cash sales transactions marked with "recorded" were not input to the system.

7. When processing orders, the sales clerk entered a discount manually into the invoice. As the sales clerk was a newly recruited member, it was noted that the employee either forgot to enter the discount or entered an incorrect level of discount.

Required:

a. For each misstatement, identify one or more types of controls that were absent.

b. For each misstatement, identify the transaction-related management assertions that have not been met.

c. For each misstatement, suggest a control that may have prevented or detected the misstatement.