You have been hired to assist with the implementation of appropriate internal controls for Maximum Entertainment, a company hired by the South Australian Government to oversee the sale of tickets for a festival to be held in Adelaide in March 2023.

The festival will involve many acts from both Adelaide, interstate and overseas and will run for 30 days across approximately 100 venues throughout Adelaide.

During your discussions with the owners of Maximum Entertainment, you are made aware that the events will have varying ticket prices ranging from $5 per ticket for the cheapest shows to $95 per ticket for the most expensive shows.

Due to changes made in response to Covid-19, no cash is allowed for the purchase of tickets by customers. All ticket sales will be made using electronic facilities (credit cards) and no physical tickets will be printed and distributed to the customers - mobile phones will be used with QR codes replacing the traditional printed ticket. The Government wants the tickets to be distributed to customers by electronic means and have asked Maximum Entertainment to determine the best way to perform it which will minimise fraud and error in ticket sale revenue.

The South Australian Government is also aware of the ongoing issues associated with Covid-19 and have asked Maximum Entertainment to adhere to all Covid related restrictions imposed by the South Australian Government. To help with this, a staff member from the South Australian Government has been assigned to provide information to Maximum Entertainment relating to the Covid-19 restrictions.

 

Required:

Using the facts contained in the case study above, identify and explain, with as much detail as possible, four (4) internal controls that you would implement to assist in minimising errors and/or fraud for Maximum Entertainment. Use the table below to identify (a) the internal control to implement, (b) the misstatement that the control will minimise/prevent and (c) the audit objective that the internal control will help achieve (you may identify either a transaction-related objective or balance-related objective). 

Provide as much detail as possible to explain the implementation of the internal control(s). Provide your answer in the section shown below.

Internal Control Identified	Misstatement Minimised/Prevented by the Internal Control	Audit Objective (Transaction or Balance Related)
Example   Appropriate hiring procedures - make sure that adequate interview procedures are implemented to identify staff that can be relied upon to sell tickets to customers.	This minimises inappropriate conduct such as providing tickets to friends for free.	Transaction-related objective(s) - Accuracy and occurrence.

Answer rating: 100% (QA)

Internal Control Identified Misstatement MinimisedPrevented by the Internal Control Audit Objective Transaction or Balance Related 1 Internal Control Identified Access Control and Authorization Exampl... View the full answer