Question: (a) Describe the main internal controls that you would expect to find in operation with re QUESTION FOUR: (15 MARKS) Machio Ltd. is an import

(a) Describe the main internal controls that you would expect to find in operation with re QUESTION FOUR: (15 MARKS)
Machio Ltd. is an import and export company located in Nairobi. The company deals in the importation and exportation of various goods for direct sales to retailers on both credit and cash terms.
gard to the company’s sales and receivables. (6 Marks)
(b)Briefly explain the inherent limitations that might hinder the effective operation of an internal control system over sales and receivables in Machio Ltd (4 Marks)
(c) Audit risk is the product of Inherent Risk, Control Risk and Detection Risk.
i.Define Inherent Risk, Control Risk and Detection Risk (2 Marks)
ii. Discuss these in the context of Machio Ltd sales and receivables. (3 Marks)

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