Snowden

Question 1

IA department staff shortages

Answer 1

IA department -important control
Enables-senior mgr.-to test weather controls are operating effectively
If staff shortage-reduces effectiveness in monitoring control

Recruit additional employees to IA dept,or outsource IA function.

Question 2

capital expenditure budget exceeded their annual budget.

Answer 2

Purchase orders for capital expenditure-placed without being agreed back to capital budgets.
Lack of control over the cptl expe process.
Resulting in overspends

monthly mgt a/cs should include-analysis of cptl expenditure against budget.
Each dept head should -include narrative -which explains the significant variances to date
Any spend in excess-of budget-must be authorized.

Question 3

Classification of expenditure into(capital & revenue)-Control

Answer 3

Reduce the risk of an incorrect assessment :
under/over statement :prfit ,asset,incorrect depreciation charge.

select sample of cptl exp purchase orders
Review -the evidence for classification is undertaken

Question 4

Physical verification of assets:4/45
4 centers out of 45 centers is visited each year

Answer 4

If the non curretn asset register-not physically verified
risk of misappropriation of asset,
Obsolete asset not identified on a timely basis

Question 5

Pre printed forms:-control

Answer 5

Can ensure all information relating to the employee has been obtained.
reduces -risk -fictitious employed

select sample of new employees added to the payroll-review the form-unique employee no
Attempt to add new joiner-with a unique number, the system should reject

Question 6

All employees can change the standing data:

Answer 6

Unauthorized changes in the standing data.
Increased risk of fraud.

Change the password-communicate with only -senior members.
If all members need to change-require authorization for all changes-from responsible official
Exception reports-generated-(every detail eho changed what change).
Review -exception report -regularly- responsible official-evidence sign.

Question 7

payroll manager review (list of bank payment & payroll records, and adjustments )

Answer 7

incorrect amount being paid to employees
Lack of segregation-payroll team process amount-payroll mgr. authorized payment

Payroll manager-not able to process changes in the payroll system
as well ass authorize payments
authorsation-outside payroll department

Question 8

Credit limit checked if requested by the customer:

Answer 8

credit limit-out of date-resulting-too high limit-or low limit.
irrecoverable debt or loss of customer goodwill and potential revenue

CL-should set-sales director.
Limit -should review regularly.

Question 9

Invoices are chases after 90 days:

Answer 9

Poor cashflow
Client service mgr-focus on customer relationship rather than chasing payments.