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AUI3702 ASSIGNMENT 2 SOLUTIONS SEMESTER 1 2022
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AUI3702 ASSIGNMENT 2 SOLUTIONS SEMESTER 1 2022
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2022THE INTERNAL AUDIT PROCESS
(AUI3702):TEST OF CONTROLS
ASSIGNMENT 02 SOLUTIONS
SEMESTER 1 2022
ASSIGNMENT 02 SOLUTIONS SEMESTER 1 2022
MEL
, You are the internal auditor at Selwick Limited, a listed company selling pesticides
to farmers country wide. You are responsible for the internal audit of the sales
department and inventory during the current financial year. During your
preliminary review you discovered the following:
a) The sales persons employed by the company visit the farmers at their farms and
use tablet computers to enquire into the availability of the required stock and to
place orders. Pesticide orders can only be placed by sales staff.
b) Once an order is placed the goods are shipped to the farmer from the closest
location using any available company to perform the courier service.
c) Restocking orders are created whenever inventory levels fall below the reorder
point.
d) Most of the products traded in by Selwick Limited reach obsolescence fairly
rapidly.
e) The annual inventory count is performed at year-end using the services of
professional counters at all the centres country wide. The count is also
supervised by the external auditors at sites chosen by the external auditors.
f) Over the past years Selwick Limited experienced unusual write-offs on inventory
as a result of goods declared obsolete during or directly after the annual stock
take.
REQUIRED:
1.1 Recommend improvements to the above system that would help Selwick
Limited to render better services to its customers and to minimize inventory
losses. (6)
The company clearly uses a system that allows for online access, access to the system could
be further diffused to allow the farmers to at least order vaccines online, or by phone or fax.
At the moment they can only order these goods from the sales staff that might not be
sufficiently available as they visit the farmers on their farms.
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