QUESTION $3$

$3\mathrm{.}1$ The audit strategy and the audit plan are closely interlinked, but the audit plan is far more detailed than the overall strategy. Discuss in affirmation with the statement

$(10$ Marks$)$

$3\mathrm{.}2$ Culture of honesty and high ethics includes "Setting the tone at the top" Discuss the statement.

$(5$ Marks$)$

$3\mathrm{.}3$ You are a recently qualified accountant and have accepted a job as financial controller for a well$-$established family business which supplies equipment to photographers, both by mail order and from its warehouse outlet. Its customers range from local to regional professionals in Southern Africa.

The customers' payment methods reflect their diversity. There are credit card transactions and customers with $30-$day credit business accounts. Most of the local customers collect their goods from the warehouse and pay in cash. You are told that cash payment probably reflects the nature of the customers' own receipts, as some photographers will often be paid in cash for weekend wedding assignments.

In your first week at the company, the sales director $($the principal shareholder's son$)$ brings to you a cheque in settlement of the account of a major customer. He explains that the cheque $($which appears to clear the amount due$)$ is in fact an overpayment, as the balance showing on the sales ledger is before allowing bulk discount $($which is calculated retrospectively$).$ The sales director shows you his calculations and the agreement as authorised by the board.

The sales director states that the customer's managing director has come to collect the discount in cash. He says that this is not an unusual occurrence for some of the company's better customers. It helps to maintain a good relationship with those customers, which leads to purchasing loyalty. Another benefit of this arrangement is that it gives the sales director regular face$-$to$-$face meetings with the senior staff of those customers. It also reduces the high charges that the bank makes for handling cash.

You ask the sales director why the customers prefer to receive a refund in cash, rather than simply pay the net amount needed to settle the account. He replies, with a smile, keeping customers happy is his motive too many questions may undermine his business survival.

REQUIRED

Relating to the case in question discusses the following four key fundamental principles:

i$)$ Integrity

$(2$ marks$)$

ii$)$ Objectivity

$(2$ marks$)$

$3$

iii$)$ Professionalism

iv$)$ Professional behaviour

$(2$ marks$)$

$(2$ marks$)$

$3\mathrm{.}3$ Describe what ICAN in relation to Namibia is $.$

$(2$ Marks$)$