You are a Senior Auditor at Lexus Audit Firm and are currently part of the audit forCars $4$ U $($Pty$)$ Ltd$,$ a car manufacturer in Gauteng. The company purchases certainof the car parts from an overseas supplier in Germany.After observing a walk through performed during the audit on the receiving of goods and recording purchases, you gained an understanding of how Cars $4$ U $($Pty$)$ Ltd receives and records spare parts from suppliers. The company's operational processes are as follows: Receiving of goods:

The spare parts from all suppliers are received in the reception area, at the administrative office of Cars $4$ U $($Pty$)$ Ltd$,$ and received by the Receiving Clerk, Tom Silver. Tom Silver had no training on receiving the goods. He omitted to check the goods against the necessary supporting documents and did not check for any damaged goods. Tom Silver performed no other work; he signed the supplier invoice and sent the invoice to the accounts department.

Recording of purchases:

All purchases are made on credit from an approved trade creditors list, and this list is updated on the Masterfile once a year. Any employee at Cars $4$ U $($Pty$)$ Ltd can make amendments to the Masterfile. The password to the Masterfile is shared amongst all the employees, and the password is updated annually. At the accounts department of Cars $4$ U $($Pty$)$ Ltd$,$ the Creditors Clerk, Patricia Homes, captures the supplier invoice into the accounting software Xrex. Patricia Homes checked the purchase order to the supplier invoice. She noted that the prices of thespare parts differ between the two documents and decided to capture the supplier invoice amount. The supplier invoice is captured and submitted onto Xrex and marked ready for payment, based on the terms agreed upon with the trade creditor.

Required:

Identify the internal control weakness in the information provided in receivingof goods and recording of purchases for Cars $4$ U $($Pty$)$ Ltd$.$For each internal control weakness identified, describe the potentialconsequences to Cars $4$ U $($Pty$)$ Ltd and recommend improvements.