Question 18 (13 marks) Part A (5 marks) You have obtained an understanding of the audit client's internal controls but noticed the following internal control weakness: The clerk was not aware of the recent change in selling prices. Accordingly, incorrect price was used on sales invoices for billing to customers. Required: What is the primary control activity that was absent? (I marks) (1 marks) b. What is the assertion that has not been met? c. Recommend an internal control to rectify the above weakness, Part B (5 marks) (3 marks) Classify the following tests into types of audit procedures including inspection of asset, confirmation, inspection of documents, analytical procedures, inquiries, recalculation, reperformance, and observation (you are required to use the below table format to show your answers): 1. Conduct a reasonableness test on depreciation expense of property, plant and equipment and compare against the amount calculated by client. 2. Discuss the probability of losing an ongoing court case and the likely compensation amount with the client's legal counsel. 3. Select samples of payroll records and compute the overtime payment. 4 Observe the endorsement of incoming checks by the accountant. 5. Interview senior management to understand if there is a segregation of duties between the credit-granting function and the sales function. Required table format Audit test (list out item numbers) Answer 1 2 3 4 5