You are the audit manager of Tiles To Go Ltd (TTG), a privately owned company that manufactures tiles with a financial year end of 31 December 2020. During the planning stage of 2020 audit, you are evaluating the effectiveness of TTGs Purchasing System and have collected the following information: When production supervisors require raw materials, such as sand, glue and colour pigments, they complete a digital requisition form available on TTGs intranet. The completed requisition form gets sent to the Procurement division without being signed or cross-referenced to the existing level of raw material inventory. Procurement division uses requisition forms to raise sequentially numbered purchase orders to the approved suppliers list. The Procurement division then authorises the orders before they are sent to TTGs suppliers. The approved suppliers list was last updated three years ago. The Warehouse staff check and verify the raw material volumes when they are received from suppliers against suppliers dispatch notes. Additionally, the quality of the goods received are checked for any damages. Thereafter, sequentially numbered Goods Received Notes are issued and sent to the Finance Division. In Finance, the purchase ledger clerk files suppliers invoices manually and at the end of the week inputs them into the ledger. She uses batch controls and gives each invoice a unique number based on the supplier code. The invoices are reviewed and authorised by the Finance Director for payment. The payments are only processed 60 days after the date that the invoice has been entered into the system.

REQUIRED

*Critically evaluate TTGs procurement system to identify four weaknesses in its internal controls and recommend how the company could eliminate each weakness.

*As the audit manager, identify four substantive procedures that you could adopt to gather evidence for the TTGs Trade Payables in the Statement of Financial Position.