AUI3701 ASSIGNMENT 2 SOLUTIONS FOR
SEMESTER 1 FOR 2022
QUESTION 1
1.1 In consideration of the abovementioned weaknesses noted, indicate ten (10) risks
and the improvements (controls) thereof. Your answer should be structured in the
following table format.
Weakness as per Risk Suggested improvement/control
question
The factory manager Fictitious requisitions The factory manager must delegate
does not authorize all due to fraud may be some of his responsibilities in order to
purchase requisitions made resulting create more time for himself of
before they are sent to fictitious purchases reviewing and approving purchase
the buying division being made. requisitions.
The assistant manager There is no clear There must be one person responsible
or foremen authorises isolation of for approving purchase requisations
these purchases. responsibility in the
sense that if
something goes wrong
on purchases, it will
be difficult to tell who
must be held
accountable
Sometimes the amounts There is a risk that the Despite the fact that the entity aims to
requested, according to entity might place earn trade discount, orders must be
the purchase orders above its needs placed according to organisational
requisition, are resulting in cashflow needs to avoid ordering of unnecessary
increased to ensure that problems goods
the Woolworks
SEMESTER 1 FOR 2022
QUESTION 1
1.1 In consideration of the abovementioned weaknesses noted, indicate ten (10) risks
and the improvements (controls) thereof. Your answer should be structured in the
following table format.
Weakness as per Risk Suggested improvement/control
question
The factory manager Fictitious requisitions The factory manager must delegate
does not authorize all due to fraud may be some of his responsibilities in order to
purchase requisitions made resulting create more time for himself of
before they are sent to fictitious purchases reviewing and approving purchase
the buying division being made. requisitions.
The assistant manager There is no clear There must be one person responsible
or foremen authorises isolation of for approving purchase requisations
these purchases. responsibility in the
sense that if
something goes wrong
on purchases, it will
be difficult to tell who
must be held
accountable
Sometimes the amounts There is a risk that the Despite the fact that the entity aims to
requested, according to entity might place earn trade discount, orders must be
the purchase orders above its needs placed according to organisational
requisition, are resulting in cashflow needs to avoid ordering of unnecessary
increased to ensure that problems goods
the Woolworks
