Homework Exercise 8.

24:
a) Describe the purpose of the control:
- Control 1: to prevent and detect the payments which are not yet recorded.
- Control 2: to prevent fraud or theft which aims at the company funds/resources,
payments are only made when goods received or ordered by the company are
confirmed exactly with the proper amount.
- Control 3: to prevent access to company funds/resources that is not authorized and
make sure all payments are approved by a suitable company.
b) Accounts and assertions that controls will affect on the financial report:
Controls Accounts Assertions
Control 1 Accounts payable Completeness
Related expense
Related asset
Control 2 Expense Occurence
Asset Accuracy
Control 3 Expense Occurence
Asset Accuracy

c) One example for each control:

- Control 1: to check sequently to ensure all pre-numbered bank transfer requisitions
are accounted for.
- Control 2: to review a sample of bank transfer requisition and check the
completeness of all procedures.
- Control 3: to review a sample of bank transfer requisition and include all evidence
of authorisation.