XYZ manufactures tiny robots designed to gather data and detect malfunctions in manufacturing machinery. They purchase components from various suppliers overseas, and their customers are dispersed across over 20 countries.

XYZ'S accounting staff is currently understaffed and is working diligently to issue the annual company financial statements within three months after the June 30 year-end. The accounting team consists of the following members:

• Marc, CPA (CFO) Primarily engaged in reviewing quarterly and annual financial statements, as well as strategic planning.
• Susan, CPA (Controller) Responsible primarily for processing all cash payments and receipts, bi-monthly bank statement reconciliations, GST/PST remittances, and drafting financial statements. Susan has been unable to take a vacation in the last three years.
• Aren, BComm (Senior Accountant) Responsible for entering all sales and purchase invoices in the system and assisting with general administrative duties, including helping to plan quarterly exhibitions.
• Luca, BA (Junior Accountant 2) In charge of creating payroll employee accounts, entering employee hours worked (approximately 48 employees), and accurately calculating net pay. Luca enters all payroll transactions, approves payments, and makes payroll remittances to the government. Often, Luca finishes his tasks by 2 pm and leaves early as he has no work scheduled.
• Eric, BComm (Junior Accountant 1) Recently joined the company and has been tasked with performing supplier statement reconciliations for Susan to the best of his abilities.

The sales manager has received requests from both international and domestic customers to offer a payment portal allowing invoices to be paid with cryptocurrencies. DT has formed an internal team of developers to have the portal up and running by January 1, 2024. While XYZ does not intend to invest in cryptocurrencies, they recognize the possibility of having some cash tied up in such currencies. The company has yet to finalize the specific cryptocurrencies it will accept from customers but aims to offer as many as possible to diversify working capital.

It has come as a significant shock to the operations manager that a few suppliers have complained about late payments from DT, and some are even refusing to supply DT in the future. Recent quality control issues have resulted in the recall of a large batch of robots, causing a $5M loss for DT. The operations manager was able to determine the component that caused the defect but could not pinpoint the actual source and period of purchase.

Required:

1. Identifying Issues DT should consider before implementing the portal to receive payments in cryptocurrencies from customers (5 marks)
2. Identifying Current and potential Internal Control Concerns should DT accept cryptocurrencies (10 marks) - Suggestion: use a table with three columns (weakness/risk, implications, recommendation)
3. How should DT report Cryptocurrency on its Statement of Financial Position (1 mark)
4. Suggest possible ways to mitigate late payments to suppliers (2 mark)
5. Briefly explain one tool that can provide transparent and immutable records of each component's journey, aiding in pinpointing the source of defects. List two challenges in implementing this tool (2 marks)