William Jackson, the CEO of RPL, has requested that the tests of controls only be performed once due to the disruption caused by audit staff to the work of the staff in the printing and shipping department. In addition, he has requested that the tests of controls occur only during July 2018, as this is traditionally the quietest time of the year for RPL. You expect the audit report to be signed on 15 August 2018.

a. For each of the manual and IT application control activities identified, design an appropriate audit procedure to test that control.

1. Accounting system automatically stops the order for any publishers who have exceeded their credit terms and limits IT application control.

2. When an order exceeds the credit limit, an authorisation from both the heads of publishing and accounts is required for the transaction to proceed manual control.

3. The accounts receivable clerk checks the prices and arithmetic accuracy of the invoices and signs the invoice as evidence of her check.

4. The cashier reconciles the total of the batch postings to accounts receivable to the amount banked for the day.

5. The assistant accountant prepares a bank reconciliation each month

6. Segregation of duties between accounts receivable and cash handling functions.

b For each of the audit procedures you described in a, outline the result you would expect if you determined that the control activity was not reliable.

1. Accounting system automatically stops the order for any publishers who have exceeded their credit terms and limits IT application control.

2. When an order exceeds the credit limit, an authorisation from both the heads of publishing and accounts is required for the transaction to proceed manual control.

3. The accounts receivable clerk checks the prices and arithmetic accuracy of the invoices and signs the invoice as evidence of her check.

4. The cashier reconciles the total of the batch postings to accounts receivable to the amount banked for the day.

5. The assistant accountant prepares a bank reconciliation each month

6. Segregation of duties between accounts receivable and cash handling functions.

c Ignoring considerations of limitation of scope, discuss the effects of Williams requests on the sufficiency and appropriateness of the audit evidence to be gathered.

d Review the sample supporting control documentation contained in the background information and identify any control deviations that would be revealed by your tests of controls