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AUI3702 ASSIGNMENT 2 SOLUTIONS SEMESTER 1 2022
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- University Of South Africa (Unisa)
AUI3702 ASSIGNMENT 2 SOLUTIONS SEMESTER 1 2022
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AUI3702THE INTERNAL AUDIT
PROCESS:TEST OF
CONTROLS
ASSIGNMENT 02 SOLUTIONS
SEMESTER 1 2022
, AUI3702 ASSIGNMENT 2 SOLUTIONS 2022 SEMEMSTER 1
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)
As 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 over the Internet, 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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