You are the audit senior at Mohamad, Abdul & Khalid Auditors, and have been assigned to the audit of DesertWear Ltd for the year ended 30 June 2021. DesertWear manufactures, wholesales and retails endurance clothing for desert climates, for sale both in the UAE and overseas. During the planning stage of the audit, you have identified the following three key internal controls over the functioning of DesertWears online inventory management system:

Internal control 1 the system will not allow a customer to place an order for an item of inventory that is currently out of stock.

Internal control 2 all new wholesale customers must undergo a credit approval check, which has to be signed off by DesertWears credit management and Chief Financial Officer, before their credit limits are approved and a debtor account established.

Internal control 3 each customer is required to enter their unique customer identification number (PIN) before an order can be processed. This is to ensure that authorized inventory orders are not placed and only customers who are approved customers are able to order online.

Required:

For each of the internal controls 1, 2 and 3, describe a test that you would perform to assess whether the control was functionally effectively

(b) Outline the result that you would expect to see if the control was functioning effectively