AUI3702 Assignment 2 semester 2 of 2022
Detailed memo.
Question 1.
1.1 1.2
Weakness Recommendation
The finance committee is responsible for financial Segregation of responsibilities between financial management and audit of financial statements
management and audit of financials this creates a by the audit committee
self review threat
The budget is prepared and approved by the church committee Another committee should review and approve the budgets prepared by the church committee in
mistakes might not be detected. in order to detect mistakes and segregation of duties.
The financial secretary has been with the church for the past fifteen There must be rotation on the tasks yearly to avoid employees being too familiar with the church operations
years, this encourages fraud within the church
Non-Compliance with Companies Act as there is no external auditor Appointment of an independent external auditor as per requirements of the companies Act.
has been appointed.
The head Usher counts the cash alone which increases the risk of The tressuarer must be present when the cash is being counted.
fraud and theft on the cash.
Cash is kept in the safe overnight exposing the church to breakin Cash should be banked the day it is collected.
and roberry.
There is no reconciliation of cash received and cash deposited. Everytime cash is deposited a reconciliation between deposits and receipt must be done with differences
reconciled.
Question 2.
2.1 Compile the audit risk applicable to each of the above objectives (a-j)
Detailed memo.
Question 1.
1.1 1.2
Weakness Recommendation
The finance committee is responsible for financial Segregation of responsibilities between financial management and audit of financial statements
management and audit of financials this creates a by the audit committee
self review threat
The budget is prepared and approved by the church committee Another committee should review and approve the budgets prepared by the church committee in
mistakes might not be detected. in order to detect mistakes and segregation of duties.
The financial secretary has been with the church for the past fifteen There must be rotation on the tasks yearly to avoid employees being too familiar with the church operations
years, this encourages fraud within the church
Non-Compliance with Companies Act as there is no external auditor Appointment of an independent external auditor as per requirements of the companies Act.
has been appointed.
The head Usher counts the cash alone which increases the risk of The tressuarer must be present when the cash is being counted.
fraud and theft on the cash.
Cash is kept in the safe overnight exposing the church to breakin Cash should be banked the day it is collected.
and roberry.
There is no reconciliation of cash received and cash deposited. Everytime cash is deposited a reconciliation between deposits and receipt must be done with differences
reconciled.
Question 2.
2.1 Compile the audit risk applicable to each of the above objectives (a-j)
