1. What is a key control? (I mark) 2. What is meant by compensating control? (I mark) 3. Design the control for the review of bank reconciliation (5 marks) 4. Mirror Mirror Windows (MMW) is a window cleaning company. Customers' windows are cleaned monthly, the window cleaner then puts a self-addressed envelope for payment under the customer's front door. MMW has a large number of receivable balances and these customers pay by choque or ca which is received in the self-addressed envelopes through the post office. The following procedures are applied to the cash received cycle a) A junior clerk from the accounts department opens the mail and if any cheques or cash have been sent, she records the receipts in the cash received log book and then places all the monies into the locked small cash bes b) The contents of the cash box are counted each day and every few days these sums are lodged by whichever member of the finance team is available. c) The cashier records the details of the cash received log book into the cash receipts day book (Le cash book) and also updates the sales ledger. d) Usually on a monthly basis the cashier performs a bank reconciliation, which he then files, if he misses a mouth then he catches this up in the following month's reconciliation Required: (1) Identify THREE deficiencies in the system above (be specific) (3 marks) (ii) Suggest controls to address each of the deficiencies identified above (3 marks) 5. For each control listed below, identify the internal control component to which it relates: (5 marks) i. A copy of the code of conduct is communicated and made publicly available to suppliers, customers, investon, creditoes, insurers, competitors, and auditors ii. Periodic comparison of amounts recorded by the accounting system with physical iii. Annual Strategy Meeting are held to identify the objectives that are important critical success factors) to achievement of entity-wide objectives relevant to financial accounting and reporting. iv. Oversight by the Audit Committee of the design of the Ethics Hotline & Whistleblower Program v. Sales orders over a set threshold require approval by management before acceptance by the system. The lack of approval creates a suspense file that is reviewed by management for clearance on a regular basis 6. The following are 5 key controls in the payroll cycle for Hilman Stores Ltd: To input hours worked, payroll accounting personnel input the employees Tax Registration Number (TRN). The system does not allow input of hours worked for invalid numbers ii. The system automatically computes pay at time and a half once hours worked exceed 80 in a 2 week pay period iii. The system generates a listing by employee names of cheques processed Department heads review these listing to ensure that each employee actually worked during the pay period. iv. The system automatically rejects processing an employee's pay if inputted hours exceed 160 hours for a 2week pay period v. The payroll application is programmed so that only human resource personnel are able to add employee's names to the employer master files Required For each control: Identify whether the control is an automated or a manual application control (5 Marks) Identify the transaction related assertion that is affected by the control (5 Marks) Identify the relevant control activity related to each control (5 marks)