Question 2 - Internal Control - Revenue & Receivables Carvonia Limited manufactures handbags. From time to time the company receives requests from customers for credit memos for goods returned. The Company has the following internal controls for recording sales returns: 1. All customer requests for credit memos are documented in a log and are forwarded to the Financial Controller (Controller). 2. The Controller reviews each credit memo request for reasonibleness and discussed it with the appropriate personnel related to the initial sale, 3. The Controller documents the credit memo on a form explaining the reason for the credit memo and the amount of the credit memo. 4. The Controller and the CFO both physically sign the credit nemo paperwork 5 The credit is issued by a separate department prior to the reduction of the Receivable balance for the customer, or is refunded by cheque. 6. The Controller updates the accounting software for the credi memo. 7. On a quarterly basis, the Controller evaluates the adequacy of the Allowance Required Two objectives of the above internal controls are to ensure recorded credit memos are made to non-fictitious cu domers, and credit memos are all accounted for a) Indicate the ISA assertion that each objective seeks to achieve 2 marks) b) Indicate the control(s) from the above summary that addresses ei ch of the assertions identified in (a) (8 marks) c) Suggest how you would test each control identified in (b) above 4 marks) d) Suggest substantive tests of transactions would Derfor foreach of onssertion identified in 14 marks) What other assertion outside of the two identifich foonia Lid want to ensure is achieved 2 marks bee Song