1) The incorrect allocation of equipment in the asset register occurred because the asset manager did not exercise proper control over the receipt of the equipment. 2) No procedures were in place for monitoring the activities of employees. 3) The required ledger control accounts should be created and updated to ensure control over funds. 4) The practices of keeping duplicate records also contributed to the unnecessarily high labour and costs. 5) According to the policies of Ltd, personal computers should be depreciated over three years. 6) During the interview with operations manager, we noted that only a verbal agreement was established between the operational manager and the service provider for waste removal. 7) Consequently, the administrative costs of the department were overstated by an amount of R300 000. 8) Management should take all possible measure to ensure that all major projects are approved according to delegation of authority. 9) Non-compliance with leave management policies and procedures resulted in excessive accumulation of vacation leave. 10)Inadequate security of electronic data compromised personal information of employees resulting in reputational damage to the company. 6 REQUIRED 4.1 Based on the information in Scenario A, classify the information (1-10) according to the elements of an audit finding. (Criteria, cause, effect, condition, and recommendation)

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 35CYBK

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1) The incorrect allocation of equipment in the asset register occurred because the asset manager did not exercise proper control over the receipt of the equipment. 2) No procedures were in place for monitoring the activities of employees. 3) The required ledger control accounts should be created and updated to ensure control over funds. 4) The practices of keeping duplicate records also contributed to the unnecessarily high labour and costs. 5) According to the policies of Ltd, personal computers should be depreciated over three years. 6) During the interview with operations manager, we noted that only a verbal agreement was established between the operational manager and the service provider for waste removal. 7) Consequently, the administrative costs of the department were overstated by an amount of R300 000. 8) Management should take all possible measure to ensure that all major projects are approved according to delegation of authority. 9) Non-compliance with leave management policies and procedures resulted in excessive accumulation of vacation leave. 10)Inadequate security of electronic data compromised personal information of employees resulting in reputational damage to the company. 6 REQUIRED 4.1 Based on the information in Scenario A, classify the information (1-10) according to the elements of an audit finding. (Criteria, cause, effect, condition, and recommendation)

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