Sales Transactions at CapeTown Essentials $($Pty$)$ Ltd

In the past fiscal year, CapeTown Essentials introduced a new promotional campaign to boost its online sales. This

campaign offered varying discounts to customers based on their purchase history and loyalty status. Additionally, a new

partnership was formed with a third$-$party logistics provider to expedite deliveries for online orders. As a result, the

company saw a significant surge in online sales, especially during the last quarter. However, the finance department

faced challenges in tracking and recording these sales due to the complexities introduced by the varying discount rates

and the involvement of the third$-$party logistics provider. Some customers reported discrepancies in their invoices,

especially related to the calculated discounts and VAT charges. Furthermore, there were instances where sales made at

the end of the month were recorded in the subsequent month. The company also introduced gift cards, leading to

situations where sales were recognized upon the purchase of the gift card rather than its redemption. The sales team,

eager to meet their aggressive targets, occasionally offered custom deals to big clients, which were not always

documented in the standard sales system but were instead recorded manually.QUESTION $6(24$ Marks$)$

Given the information provided about CapeTown Essentials' sales transactions and referring to the module

guide:

a$)$ Identify and list the financial statement assertions applicable to sales transactions as mentioned in the

module guide.

$(6$ Marks$)$

b$)$ For each assertion, provide a brief description outlining what that assertion means. $(6$ Marks$)$

c$)$ For each identified assertion, explain the potential risks relating to that assertion for CapeTown Essentials $(6$ Marks$)$

d$)$ Recommend ONE $(1)$ audit procedure for each identified assertion, taking into account the risks you've

identified for that assertion, to ensure the sales transactions are accurately represented in the financial

statements.

$(6$ Marks$)$