The followings are misstatements that have occurred in Sedap Food Grocery Store, a retail and wholesale grocery company: 1. Incorrect price was used on sales invoices for billing shipments to customers because the wrong price was entered into the computer master file of prices. 2. A vendor's invoice was paid twice for the same shipment. The second payment arose because the vendor sent a duplicate copy of the original 2 weeks after the payment was due. 3. During the physical count of inventory of the retail grocery, one counter wrote down the wrong description of several products and miscounted the quantity. 4. A salesperson sold an entire carload of lamb at a price below cost because she did not know the cost of lamb had increased in the past weeks. 5. An accounts payable clerk processed payments to himself by adding a fictitious vendor address to the approved vendor master.

Required:

(a) For each of the misstatements:

i. identify one or more types of controls that were absent;

ii. identify the transaction-related audit objectives that have not been met;

iii. suggest a control to correct the deficiency.

(b) Explain the meaning of 'control environment' and the factors auditor must evaluate to understand it.