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ACCA F8 INT Revision Mock - Ans J11%28with marks%29

ACCA F8 INT Revision Mock - Ans J11%28with marks%29

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ACCAPaper F8 (INT)Audit and AssuranceJune 2011Revision Mock – Answers
To gain maximum benefit, do not refer to these answersuntil you have completed the final assessment questionsand submitted them for marking.
© Kaplan Financial Limited, 2011The text in this material and any others made available by any Kaplan Group company does notamount to advice on a particular matter and should not be taken as such. No reliance should beplaced on the content as the basis for any investment or other decision or in connection with anyadvice given to third parties. Please consult your appropriate professional adviser as necessary.Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability toany person in respect of any losses or other claims, whether direct, indirect, incidental,consequential or otherwise arising in relation to the use of such materials.All rights reserved. No part of this examination may be reproduced or transmitted in any form orby any means, electronic or mechanical, including photocopying, recording, or by any informationstorage and retrieval system, without prior permission from Kaplan Publishing.
Risks and controls in wages system
Risk ControlHours overstated
The hours worked may be over-stated asemployees only have to state how many hoursthey were at the inventory count.As employees arrive at the count, ensure theysign a sheet stating the time of arrival, and addthe time of departure when they leave. Thissheet to be under the control of an authorisedperson to ensure details and times entered arecorrect.
Dummy employees
Employee names could be added to theattendance sheet without the employee beingthere; that is a colleague could add a friend’sname at the end of the day and the friend’swages shared later after payment.The number of staff working on the inventorycount should be agreed to the attendancesheet during the day by a responsible officialand any discrepancy investigated.Alternatively, the official can watch who signsthe sheet to ensure they do not add any namesapart from their own.
Incorrect rate
Employees should be paid at “time and a half”for the hours worked on the inventory count.There is a risk that the accounts departmentuse the wrong rate in calculating gross wagespayable.The rates used should be authorised by a seniorperson such as the Finance Director and agreedback to an authorised rate list issued by theHuman Resources department.
Incorrect calculation of net pay for the day
Employees will be paid overtime for attendingthe inventory count as well as a mileageallowance. There is the risk that either net payor the mileage allowance is incorrectlycalculated.The calculation of net pay and mileageallowance should be checked by the FinanceDirector and the payment sheet signed toconfirm this check has taken place.
Payment made to wrong employee
As the attendance sheet is to be signed by theemployee only, there is the risk that theemployee’s name is read incorrectly resulting inthe wrong employee being paid for attendingthe inventory count.The employees attending the inventory countshould be agreed in advance and a typed list of names available for the employee to signagainst to confirm attendance at the count.
Mileage claim
Staff were paid mileage according to location of the store they normally worked at. The wrongstore could be allocated to a staff memberresulting in incorrect mileage being paid.Prior to paying the mileage claim, staff namesshould be checked to a list of employees ateach store. When overtime and expenses arepaid, the store should be noted on the paymentsheet and the sheet signed by the FinanceDirector to confirm the accuracy of thesedetails.

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