You are the senior in charge of the audit of Cunningham Ltd., a computer software company. The audit junior has identified the following significant points of weakness in the accounting and control systems:

Sales Credit is given to new customers without adequate references being taken up or proper authorization. In addition, credit limits are being exceeded, with credit limits being unrealistic in many cases. Sequentially numbered credit notes are not used.

Petty cash A large number of petty-cash payments are supported only by signed petty cash vouchers without any independent supporting evidence.

Capital assets A register of capital assets is not maintained.

Payroll The monthly payment list for payroll are signed by directors without reference to the detailed payroll register.

Purchases Invoices and statements of account are not always provided to the directors when they sign the cheques.

Required: Draft points for inclusion in a letter to the board of Cunningham explaining: 1. The implications of each weakness on the business 2. Your recommendations for controls that should be put in place to address each weakness