Exam (elaborations)
AUE2602 Assignment 4A Semester 1 2024 - DUE 9 May 2024
- Course
- AUE2602 (AUE2602)
- Institution
- University Of South Africa
AUE2602 Assignment 4A Semester 1 2024 - DUE 9 May 2024 QUESTIONS AND ANSWERS
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[Date]AUE2602 Assignment
4A Semester 1 2024 -
DUE 9 May 2024
QUESTIONS AND ANSWERS
, AUE2602 Assignment 4A Semester 1 2024 - DUE 9 May
2024
ShoeCraft (Pty) Ltd is a reputable shoe manufacturing company known for its
high-quality footwear. As an auditor conducting an inventory cycle audit, you
have been tasked with evaluating ShoeCraft's internal controls. During your
review, you note the following:
1. Mrs Nike is responsible for receiving completed goods at the companys
warehouse. She checks the slip received from the production section,
compares it with the number of boxes entering the warehouse and signs it. She
then updates the inventory records on the company’s accounting system,
Thyme-Accounting, by signing in with her unique password.
2. The warehouse has four entry points, therefore entering and exiting the
warehouse are quick processes.
3. Staff responsible for filling orders can manage their task quickly by
entering through sliding doors and selecting the boxes that they need from the
shelves.
4. These staff members then manually write down which stock they have
taken from the selves on a list kept in the warehouse.
5. This list is then totaled at the end of the week and the Thyme-Accounting
system is updated accordingly.
6. The Thyme-Accounting system is not updated in real timebecause staff has
not been trained to use the system, and prefer not to engage with the system
unless it is absolutely necessary.
7. When staff do need to access the system, they use Mrs Nike’s password to
gain access to and update the necessary records.
8. Inventory counts take place once a year, just before the year-end audit.
9. There are no established procedures for reconciling physical inventory
counts with the inventory records in the system.
10. The company lacks consistency in its inventory valuation methods. This is
due to a disagreement between two of its diretors, Miss Adidas and Mr Puma.
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