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Question 1

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You are the audit senior assigned to the audit of Fix-IT Ltd,a motor vehicle spares company.You obtain an understanding of the inventory function from Mr Thato,the warehouse manager.

He informs you that there are two pickers in the warehouse who are responsible for picking the goods to fulfil customer orders but the despatch clerk, Mr Jazzy, is the only one allowed to despatch the fulfilled orders to the customers. Which one of the following alternatives best describes the control activity achieved by the above-mentioned procedure performed in the warehouse of Fix-IT Ltd?

a.

Isolation of responsibility

b.

Review of fulfilled order

c.

Segregation of duties

d.

Verification of fulfilled order

Clear my choice

Question 2

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You are the audit senior assigned to the audit of Fix-IT Ltd, a motor vehicle spares company.You attend the year-end inventory count at Fix-IT Ltd and note the following procedures that take place:

(i) The inventory count procedures are addressed to the auditors and management of Fix-IT Ltd.

(ii) The inventory count procedures include the method of counting and a copy of the warehouse floor plan.

(iii) The inventory count procedures specify that the count teams consist of warehouse personnel and the auditors.

(iv) Inventory sheets are pre-printed, numerically sequenced with inventory details and description and one column to capture the quantity per counted item.

(v) Once inventory has been counted, it is marked with a green sticker on the item illustrating that it has been counted.

From the above procedures performed at the year-end inventory count, identify which of these procedures are weaknesses in the inventory count?