DEPARTMENT OF ACCOUNTANCY

Governance and Control (GOC3AB0, GAC3AB0, ADIA003, S3PACQ2)

PAST PAPER PACK SUGGESTED

SOLUTION 2024

Index:

A ASSESSMENT OPPORTUNITY 1 SUGGESTED SOLUTION - 2023

B ASSESSMENT OPPORTUNITY 2 SUGGESTED SOLUTION – 2023
C FINAL ASSESSMENT OPPORTUNITY SUGGESTED SOLUTION – 2023
 UNIVERSITY OF JOHANNESBURG

B COM ACCOUNTING

ADVANCED DIPLOMA IN ACCOUNTACY

BRDIGING PROGRAMME IN ACCOUNTANCY

ASSESSMENT OPPORTUNITY 1

17 MARCH 2023

MARKS: 80

ASSESSORS: 1. Dr. Rozanne Smith

2. Mrs Belinda Schutte

3. Ms. Faheema Dawood

SUGGESTED SOLUTION FOR ASSESSMENT 1 (2023)

Assessment 1 (SUGGESTED SOLUTION)

a) With specific reference to “Risk Management”, provide the type of risk evident in the scenario. For
each type of risk, provide a description of the type of risk, using examples from the scenario. (20)

Type of Risk Marks Risk description and example Marks

Credit Risk 1 • Risk that Clickbait may not recover money from goods 1
sold to customers on credit;
• Customers that purchased on credit are not paying 1
their debt on time, creating the risk that Clickbait
won’t recover money for goods sold. 1
Liquidity and Cash 1 • Customers are not settling accounts on time, this 1
Flow Risk affects Clickbait’s cash flow;
• Unsettled customer accounts are only followed up on
after six months have passed, this can negatively 1
impact Clickbait’s cash flow;
• As a result of cash flow shortages, Clickbait cannot
settle outstanding debts and pay for expenses 1
incurred.
Customer Demand 1 • The risk that Clickbait will no longer meet the 1
Risk customer’s demands;
• Clickbait cannot print all orders on time as load 1
shedding severely impacts productivity;
• Clickbait cannot print all orders on time if they have 1
not received their supply of ink for the printing
machine;
• The old printing machine can only print one job at a 1
time.
Exchange Rate Risk 1 • Risk of fluctuation in exchange rates; 1
• The R/€ is not favorable for importing of goods. 1
Interest Rate Risk 1 • The Reserve Bank has announced an increase in the 1
interest rate which will increase the amount Clickbait
pays for the machine;
• Increase in repayments will further affect the shortage
of cash flow. 1
Employees Risk 1 • Three graphic designers have been retrenched, this 1
will result in further decreased productivity levels daily;
• The remain graphic design will have to take up the
tasks and responsibilities of the retrenched staff 1
members, and will not be compensated for the
additional workload; 1
• This could impact staff morale; unhappy staff may
resign or protest 1
• Staff could strike, or take Clickbait to the CCMA, which 1
could result in further legal fees for Clickbait. 1
 1
Litigation/Contract 1 • Should the employees who have been retrenched sue 1
Risk Clickbait, there will be a court date, legal costs, and
possible further payouts to these employees. 1
Supplier Risk 1 • The electricity provider cannot provide enough 1
electricity, which impacts productivity and ultimately 1
has a negative impact on profits. 1
• The ink used in the new printing machine is not readily
available in South Africa, if the supplier in Germany is
unable to fulfill the ink order, productivity levels will be 1
affected
Production Risk 1 • Clickbait may experience a decrease in profits earned 1
as a result of the delay by having to wait for the special
grade ink to arrive;
Available Marks 9 Available Marks 28
Maximum Marks 5 Maximum Marks 15

b) With specific reference to the “Investment”, provide the weaknesses evident from the above
scenario, and for each weakness, provide an internal control. (19)

Weakness Marks Internal Control Marks

There was no presentation/proposal to the
Capex Committee regarding the purchase
of the machine.
The necessary supporting documents
were not obtained, as they only had a
quote from one supplier. No comparative
quotes were obtained.
The documentation regarding the source
of finance was not obtained.
The transaction was not presented to the
board of directors (BOD)/GB, and thus not
discussed to be minuted.
The relevant level of authorization was not
applied for the purchase of the machine,
as Mr Staples decided by himself.
Mr Staples had an interest in the supplier
they used, and this was not disclosed to
the BOD/GB.
The supplier only provided a purchase
order. There was no delivery note or
invoice.
1 There should be a formal written 1
proposal to the Capex Committee
regarding the purchase.
1 There should be quotes from more than 1
one supplier in order for the BOD to
compare the prices and choose the best
supplier.
1 There should be formal documentation 1
on the source of finance which should
be presented to the BOD.
1 The quotes and sources of finance 1
should be presented to and discussed
with the BOD. The decision taken should
be minuted in the minutes of the 1
meetings.
1 The different levels of authorization 1
should be applied in the organization.
1 Mr Staples was supposed to disclose the 1
interest in the contract that he has with
the supplier to the BOD.
1 The supplier should have provided a DN 1
and invoice as well to ensure that the
transaction could be accounted for
correctly.
Only the purchase order was used to 1 There should be an invoice (for the 1
capture the transaction in the accounting amount) and a GRN (for the date) in
records (date). order to ensure the accounting records
are correct.
Mr Staples does not know where/if there 1 There should be a signed agreement 1
is a signed contract with NewMutual bank with NewMutual Bank.
for the financing of the machine.
The accounting records could be incorrect 1 The amount on the invoice should be 1
due to not using the invoice to capture used to capture the machine.
the amount of the machine, and this will
affect the depreciation calculations. 1 All depreciation calculations should be
reviewed. 1
The cut off period could be incorrect, due 1 The date on the GRN should be used to 1
to not using the date of a GRN to capture capture the correct cut off for the
the transaction. machine.
Available Marks 12 Available Marks 12
Maximum Marks 9 Maximum Marks 10

c) With specific reference to the “payment of the generator”, provide the weaknesses evident from
the above scenario, and for each weakness, provide an internal control. (10)

Bank and Cash:

Weakness
Only one person has access to the Clickbait
bank account, thus there cannot be multi-
level passwords.
Mr Staples can access the bank account
from anywhere. It is not limited to one
workspace.
The payments are also not limited to a
specific day.
There are no access controls on the bank
account profile.
Thus, there are not two individuals who
effect the payments, only Mr Staples.
There is unlimited log in attempts, and the
profile will not lock after three
unsuccessful attempts.
There is no segregation of duties (SOD) as
Mr Staples initiates all the payments, and
he also does the bank reconciliations.
Available Marks
Maximum Marks
Marks Internal Control Marks
1 There should be multi-level passwords 1
from two senior officials, and these
must be simultaneously entered to get 1
access to the bank account.
1 The access to the bank account should 1
be limited to one workspace/terminal.
The payments should be limited to a
1 specific day. 1
1 Access controls are very important for 1
any banking profile and must be
implemented.
1 There should be two individuals who 1
effect all payments.
The log in attempts should be limited to
1 three, and thereafter the profile should 1
be blocked.
1 There should be SOD, and an 1
independent individual should be doing
the bank reconciliations (not the same
person who made the payments).
7 Available Marks 8
5 Maximum Marks 5
 d) With specific reference to the “petty cash”, provide the weaknesses evident from the above
scenario, and for each weakness, provide an internal control. (5)

Weakness Marks Recommendation Marks

Everyone has access to the petty cash box. 1 One person should be responsible for 1
the petty cash.
There is no safekeeping of the petty cash The petty cash box should be kept in a
box. 1 safe place. 1
There are no reconciliations for the petty 1 Reconciliations should be performed 1
cash. regularly.
Some expenses were resubmitted, 1 Reimbursements should be done for the 1
meaning that the supporting exact amount of the expense, and all
documentation was not canceled upon receipts should be canceled once they
submission. have been reimbursed. 1
The expenses allowed from the petty cash 1 All expenses allowed from the petty 1
are not defined. cash should be clearly defined.
Available Marks 5 Available Marks 6
Maximum Marks 2 Maximum Marks 3

e) With specific reference to “Purchases from suppliers”, provide the test of controls you will perform
to ensure that the implemented internal control is working as designed and state the relevant
control objective the internal controls will achieve if implemented properly. (20)

No. Test of control Marks Control Objective Marks

1. Enquire from the purchase department if a 1
requisition is generated when the re-order Completeness 1
level is reached.
2. Select a sample of a PO and inspect whether it 1 Validity 1
is numeric and triplicate. 1 Completeness 1
3. Select a sample of a PO and inspect if the 1
following details are present:
• The name of the supplier
• The quantity ordered 1
Validity
• A description of the materials 1
Completeness
• The price of the materials Max 2 1
Authorisation
• Discounts if applicable
• Terms of payment
• Delivery address
• Signature of the buyer
4. Enquire from the purchase department about 1
the approved supplier list.
Completeness 1
Select a sample of PO and inspect whether 1
Authorisation 1
suppliers on the approved supplier list have
been used.
5. Select a sample of the PO and inspect for the 1
Authorisation 1
signature of the purchase manager.
 6. Perform a site visit and observe the receiving 1
Completeness 1
clerk inspecting for quality, quantity and type.
7. Select a sample of the GRN and inspect 1
whether it is numeric and duplicate. 1
Select a sample of the GRN and inspect if the 1
following details are present:
• Quantity of goods received Validity 1
• PO number Completeness 1
• Date on which goods were received Max 2
• Description of the goods
• Details of person who received the
goods
8. Enquire from the ordering and accounts 1
department if they have received a copy of the Completeness 1
GRN.
Available marks 16 Available marks 13
Maximum marks 10 Maximum marks 9
Presentation Mark (Terminology) 1

f) With specific reference to “Payments made to suppliers”, state whether you agree with the
definitions of the control objectives implemented and provide the correct definitions if needed. (5)

Marks
No, I do not agree with the definitions of the control objectives implemented. 1
The correct definitions are as follows:
• Validity – All payments on creditors accounts are valid and are supported by proper 1
documentation;
• Authorisation – All payments are approved according to company policy; 1
• Completeness – All valid payments are correctly recorded and nothing is left out; 1
• Accuracy – Payments are made at the correct amount and is arithmetically correct; and 1
• Classification - All payments classified to the correct creditor's account 1
Available marks 6
Maximum marks 4

Precision and Interpretation marks (2)

(ALL students to receive these marks)

2PI
 UNIVERSITY OF JOHANNESBURG

B COM ACCOUNTING

ADVANCED DIPLOMA IN ACCOUNTACY

BRDIGING PROGRAMME IN ACCOUNTANCY

ASSESSMENT OPPORTUNITY 2

5 MAY 2023

MARKS: 100

ASSESSORS: 1. Dr. Rozanne Smith

2. Mrs Belinda Schutte

3. Ms. Faheema Dawood

SUGGESTED SOLUTION FOR ASSESSMENT 2 (2023)

Assessment 2 (SUGGESTED SOLUTION)

a) With specific reference to “the investment in delivery vehicles”, provide the test of controls you will
perform to ensure that the implemented internal control is working as designed. (15)

No. as per Test of Control Marks

scenario
1 Select a sample of fixed asset purchases and inspect that the supporting 1
requisition and capital budget exists.
2 • Enquire with the board/capex committee about the policy w.r.t. the 1
authorisation of purchases of delivery vehicles.
• Inspect that there is a numerical capital requisition, and that it is authorised. 1
• Select a sample of capital requisitions and inspect that the numerical
sequence was revied by the purchasing clerk. 1
3 • Inspect that the decision was recorded in the minutes as proof of 1
authorisation.
4 • Enquire with senior management about the recording of the delivery vehicles 1
once purchased.
• Select a sample of purchases and inspect that the delivery vehicles were
recorded in the FAR. 1
5 • Enquire with the client's personnel about the procedures w.r.t. the periodic 1
comparison of fixed assets with book assets.
• Observe proof of comparisons by client official (independent senior official). 1
6 • Enquire from management about procedures followed when recording an 1
asset.
• Inspect that the assets are recorded as per the amount on the invoice. 1
7 • Test the functioning of programmed controls. 1
• Select a sample of calculations and recalculate the depreciate to ensure that
the calculations are done accurately. 1
• Select a sample of calculations and inspect that there is proof of
independent review of the calculations (by way of signature). 1
8 • Verify/enquire the procedure followed when classifying the assets and 1
inspect/verify that the classification of assets is according to the policy. 1
9 • Inspect the fixed assets register and the ledger accounts for maintenance 1
costs that have been incorrectly classified.
10 • Enquire about procedures w.r.t. recording and cut-off. 1
• Select purchases and sales from source documents and follow it through to 1
the ledger accounts and fixed asset register - ensure recorded in correct
period. (Test also in other direction from records to supporting
documentation). 1
11 • Observe the procedures w.r.t. the authorised use of the delivery vehicles. 1
12 • Enquire with personnel about procedures w.r.t. safeguarding and use of 1
delivery vehicles.
1
 • Observe the physical safeguarding of the delivery vehicles against the
elements.
13 • Investigate the company’s insurance policy and proof of application of the 1
policy requirements.
• Confirm by way of enquiry and inspection of insurance contracts that the
assets are insured. 1
Available marks 25
Maximum marks 15

b) With specific reference to “the purchase of uniforms for the cleaners”, identify and explain the
risks the internal controls are mitigating. (10)

No. Risk Marks

1. Risk that an order is not acted upon. 1
Risk that an order is not placed on a timely basis. 1
2. Risk that there might be duplicate or missing PO’s. 1
Risk that an order might be placed with the wrong supplier. 1
Risk that the wrong quantity might be ordered. 1
Risk that the wrong price might be included in the PO. 1
Risk that discounts might not be utilised. 1
Risk that the incorrect terms of payment are applied for the purchase. 1
Risk that the uniforms are delivered to the incorrect address. 1
Risk that a fictitious order might be placed. 1
3. Risk of an unauthorised purchase. 1
Risk of theft of the uniforms. 1
4. Risk that the wrong quantity might be delivered and accepted. 1
Risk that torn of inferior quality uniforms might be delivered. 1
5. Risk that there might be duplicate or missing GRN’s. 1
Risk that the wrong quantity might be accepted. 1
Risk that the incorrect date will be used for recording purposes. 1
Risk that a fictitious delivery might be accepted. 1
6. Risk that the wrong quantity will be recorded. 1
Risk that the wrong date will be recorded. 1
Risk that the wrong price will be recorded. 1
Risk that the wrong price will be paid to the supplier. 1
Available marks 22
Maximum marks. 10

c) With specific reference to “the production of the cleaning products”, provide the weaknesses
evident from the above scenario, and for each weakness, provide an internal control. (15)

Weakness Marks Internal Control Marks

When issuing the raw materials to 1 The pre-numbered raw materials issues 1
production, a purchase order (PO) is used slip (RMI) is a request for the issue of raw
as the source of document.

The PO is prepared by the accountant as
he needs to calculate the cost of the
product, and therefore needs to know the
cost of the raw materials issued.
There is no use of a CJC/IJC. The
accountant will use a blank piece of paper
to capture the costs.
There is no daily production report being
issued by the accountant (he only uses the
blank piece of paper).
The accountant also does not send a copy
of the daily production report (as there is
no DPR) to the raw material store staff.
Time spent at each point in the production
process is captured by each employee in
their diaries.
They will then share the hours with the
foreman at the end of the day.
There is no evidence of any discrepancies
being followed up.
Each employee will inspect the products
before they move to the next stage in
production.
No signature is provided by any
manager/foreman.
There is no completed job card that is
prepared. The accountant only uses the
blank piece of paper, and the foreman
receives the hours from the employees.
materials required for a particular
production run.
1 The RMI should be prepared either by
the production planning department or,
more likely, the production department 1
or factory manager.
1 All such issues to production must be
accounted for as allocated to the
particular work in progress customer job 1
card (CJC) or inventory job card (IJC).
1 All raw materials issued to production 1
should be listed on the daily production
report and a copy sent to the raw 1
1 materials stores staff to compare with
the raw material inventory master file
records for that day.
1 Time spent on each stage of production,
by production employees or in machine
time, should be captured onto the 1
relevant job card (CJC or IJC) by simply
writing the time on the card, or by the
employee using the card to ‘clock in and
out’.
1 At the end of each day, the total time 1
recorded on job cards should be
reconciled to the total hours worked by
production staff.
1 If more hours are recorded on job cards 1
than were actually spent by the
employee at work that day, or week, the
discrepancy should be queried and
corrected by the production manager.
1 The shift foreman or production manager 1
should be assigned the responsibility of
inspecting that each stage of the
production process has been properly
1 completed, before the goods pass to the
next stage. This authorisation should be
done via a signature on the relevant on
the job card.
1
1 The raw materials, labour and machine 1
hours worked, as well as overhead
allocations on the completed job card
should be inspected by the production
manager to ensure all production
charges are correctly recorded.
Goods are transferred to finished goods by
the very last employee who handles the
products in the production process. He
performs the last “check” to ensure that
goods are ready for delivery or to be
stored in inventory.
No one signs as proof of receipt of the
products.
Available Marks
Maximum Marks
1 The factory or production manager 1
should authorize, by signature, the
transfer of the manufactured goods to
inventory.
1 Acceptance of the goods into finished 1
inventory should be acknowledged by
signing the completed production report
by the finished goods inventory stores
staff.
13 Available Marks 13
7 Maximum Marks 8

d) With specific reference to “the sale of cleaning products”, identity and explain the weaknesses
evident from the scenario and for each weakness identified, provide an internal control PCC can
implement to mitigate the weaknesses. (20)
Weakness Marks Internal Control Marks
PCC has no credit application process in 1 PCC should implement a credit 1
place. application process. The process should
be as follows:
• Application should be 1
completed;
• Background checks should be 1
determine to ensure the
customer is creditworthy;
• If customer is creditworthy 1
credit department will establish
a credit limit; and
• The information of the customer 1
should be captured on the
permanent master file.
The cashier does not determine if the 1 The cashier should before accepting the 1
existing customer has sufficient credit left sale ensure the customer has sufficient
for the sale. credit available.
The cashier does not determine if the 1 The cashier should before accepting the 1
existing customer’s account is paid up to sale ensure the customer’s account is
date. paid up to date.
There is no internal sales order (ISO). 1 When an order is received from a
The details of the customer is also 1 customer a numeric ISO should be 2
incomplete. generated, which also includes the
following:
• The quantities of the cleaning 1
products; and
• The price per the official price 1
list.
The cashier authorises the sale.
The cashier only phones the warehouse
manager and no copy of the ISO is sent to
the dispatch function.
There is no back order note generated for
products that are out of stock.
The cashier also does not inform the
customer of this.
The DN is only one copy of the DN and not
two as required.
The DN is incomplete as it only includes
the description of the cleaning products.
The gate control procedure is incomplete,
as the security only signs the DN.
No copy of the DN is given to the
customer.
The price on the DN is used to generate the
invoice.
Available marks
Maximum marks
1 The credit manager has to authorise the 1
sale.
1 A copy of the ISO needs to be transferred 1
to dispatch in order to generate the
picking slip.
1 A back order note needs to be generated 1
for products that have been identified as
1 out of stock and the customer needs to
receive a copy of the back order note. 1
1 The DN needs to be in duplicate format. 1
1 The DN should also include the quantity 1
of the cleaning products.
1 The security guards should first count 1
the cleaning products and compare this 1
to the DN before signing the DN and
allowing the driver to exit.
1 The customer should receive a copy of 1
the DN.
1 The price as per the official price list 1
should be used to generate the invoice.
14 Available marks 21
8 Maximum marks 12

e) With specific reference to “the Cash up process in the PPC shop”, provide the risks evident from the
above scenario. (10)

As per the scenario (for Risks Marks

completeness)
The cashiers will receive an
undisclosed amount of money
every morning and place it in
their till (not really knowing how
much there is).
A manual system is used, and
therefore the cashier writes
down the products purchased,
and they calculate the total and
change by using a calculator.
Should they make a mistake, they
make a note, and tell the
supervisor at the end of the day.
All money and supporting
documentation are given to the
supervisor at the end of the day.
Due to the amount being undisclosed, the cashier will not 1
be able to balance his/her float at the end of the day.
This increased the risk that there will be
theft/fraud/unintentional mistakes that are not detected. 1
There is the risk that calculation errors could be made. 1
The customers could be unhappy if they receive the wrong
change (whether intentional or unintentional). 1
The cashier could possibly not disclose the mistakes and 1
use it to his/her own benefit e.g., if a customer paid too
much/too little.
There is the risk that the supervisor could use this to his 1
own benefit. He could intentionally steal money and say
that the cashier was “short” of some monies.
The supervisor will then count all There is a risk of theft, as there is no supervision over the 1
the money and compare it to the counting of the money.
source documents.
Most days the supervisor picks up There is the risk that the supervisor is lying about the 1
mistakes, and the cashiers have mistakes.
to pay in the missing monies He could be pocketing the money, and have the cashiers 1
pay for his fraud/theft.
One of the drivers (who also There is the risk that criminals could establish this routine 1
deliver the cleaners to the behaviour and follow the driver on a Monday in order to
relevant clients on a daily basis) steal the cash.
will bank the cash receipts every There is the risk that one of the employees could “tip off” 1
Monday. criminals about the fact that this is the routine followed
every Monday morning.
There is a risk that the driver could also steal some of the 1
money.
This is done due to the high The high volumes of cash immediately create the risk of 1
volumes of cash received over being hi-jacked/robbed for the money.
weekends.
The driver collects the money at There is a risk related to driving around with the large 1
08:00. He then drops off the volumes of cash. It could be stolen by some of the
cleaners at one of their clients in employees.
Centurion, and from there he will The driver could be robbed/hi-jacked. 1
bank the cash. The driver could get into an accident, and the money will
be exposed and at risk of theft. 1
It has happened in the past that There is the risk of theft. If the driver has access to the 1
the delivery vehicle needed money, he could purchase food, steal money, and lie about
diesel, and then he would simply the amount to diesel he put in the car.
take some of the cash from the
receipts and use that to fill up the There is the risk of not reconciling the accounting records, 1
tank with diesel. if all supporting documentation are not provided.
The driver is often asked to keep Money could be stolen. 1
some of the money aside to give Reconciliations could be incorrect. 1
to the cleaners as taxi fare. Employees could lie about the amount of taxi fare, and thus 1
take more that they are supposed to.
Other valid risks 2
Available Marks 23
No marks awarded, only for Maximum Marks 10
completeness of the solution.

f) With specific reference to the “payroll” provide the weaknesses evident from the scenario, and for
each weakness, provide an appropriate internal control. (9)

Weakness Marks Internal Control Marks

Applicants for cleaning jobs receive a 1 Interviews should be conducted with all 1
contract with an offer of employment applicants before an offer of
upon enquiry for job vacancies, this means employment is sent to a potential
that no interviews are conducted. employee.

The cleaning supervisor in charge of all

cleaners should be present during the 1
interviews.
Employees make changes regarding 1 Changes to an employee’s details should 1
banking details themselves. This means be documented on a pre-numbered
that there is no formal authorisation for payroll amendment form.
any new changes, nor is there a formal 1
amendment form. Changes to an employee’s details should
be supported by the appropriate 1
supporting documents.

Any changes to an employee’s personal

The hours recorded are obtained directly
from the employees. Employees could
state that they have worked more hours
than they have, and in turn get paid more
than they deserve.
details should be authorised by a senior 1
member in the HR department.
1 The hours recorded on the payroll 1
should be obtained directly from the
clock card machine.

Cleaners are not making use of clock cards

to record the actual hours worked for the 1
week.
Employees are not required to sign a 1 Employees should sign the payroll 1
register as proof of collection. This may register as proof of receipt of wages.
lead to employees denying receipt of
wages for the week.
Unclaimed wages are kept the top drawer 1 Unclaimed wages should be kept by the 1
of the cleaning supervisor’s desk. This paymaster and should be locked away in 1
could result in theft of the unclaimed a safe.
wages.
Available Marks 7 Available Marks 9
Maximum Marks 4 Maximum Marks 5

g) With specific reference to the “purchasing of a new computerised system”, provide the weaknesses
evident from the above scenario, and for each weakness, provide an internal control.
(15)

Weakness Marks Internal Control Marks

They will purchase an “over the counter” 1 When purchasing a package you should 1
package from a friend. He/She could not be do so from a reputable supplier.
a reputable supplier.
1
The friend promised to assist with any
issues they might have in future, but this is
not a guarantee that there will be support
after the sale of the POS system.
They have selected a very new package,
that is the cheapest option. This package
could not meet their needs.
This package has not been tried and tested
by many, as it is new.
The package will not be testing in phases.
The package needs some major changes in
order to meet their needs. Some changes
might not be possible.
• System changes are being made, but
the wrong process is being followed.
• They do not make use of any change
forms to authorise any of the changes.
• The IT specialist will simply make the
changes based on the request by the
cashiers, and there is no authorisation
by a line manager.
No testing will be done on any of the
changes made. They will tweak the
changes as they go.
Available Marks
Maximum Marks
h) Describe how you will ensure that the changes made to the new POS system is complete.
Completeness of changes:
You should take into consideration the
1 quality of maintenance you will receive
from the supplier.
1 When selecting a package, make sure 1
you have discussions with others, you
observe the package being used, and ask
1 others about:
• The facilities offered by the
program; MAX 3
• the freedom from error,
• the speed and efficiency,
• the ease of use.
1 When implementing a package, you
should make use of independent testing, 1
and review the experiences of the users. 1
1 Minimum changes should be made the 1
package. Not major changes.
1 • Change forms should be used for all 1
the changes made.
1 • The change forms should be pre- 1
numbered and locked away when
not required.
• Any change requests made by the 1
users of the system must be
1 approved by the Line Manager of the
user and a reason as to why the
change is necessary must be
provided.
• All change forms need to be signed
by Management or the Computer 1
Steering Committee prior to the
change being affected.
1 After the change has been made, an IT 1
expert is to test the change to determine
if it has been made as per the approved
change request and is working
effectively.
10 Available Marks 14
7 Maximum Marks 8
(3)
Marks
 • Pre-numbered change request forms should be used for all changes; 1
• Do regular sequence checks on the pre-numbered change forms; 1
• Enter change forms in a register to ensure there is record of all changes; 1
• Outstanding requests for changes should be reviewed by a senior official. 1
Available Marks 4
Maximum Marks 3

Precision and Interpretation marks (3) (ALL students to receive these marks)
 UNIVERSITY OF JOHANNESBURG

B COM ACCOUNTING

ADVANCED DIPLOMA IN ACCOUNTACY

BRDIGING PROGRAMME IN ACCOUNTANCY

ASSESSMENT OPPORTUNITY 3

14 JUNE 2023

MARKS: 120

ASSESSORS: 1. Mrs Belinda Schutte

2. Ms. Faheema Dawood

SUGGESTED SOLUTION FOR ASSESSMENT 3 (2023)

Assessment 3
a) With specific reference to “Purchasing of textbooks from wholesalers”, identify and explain the
weaknesses. For each weakness identified provide internal controls which can be implemented to
mitigate the weakness.
Weakness
There is no re-order level in place, the
cashier will simply check which textbooks
have low stock on the shelves.
The cashiers have the responsibilities
generate the PO.
There is no segregation of duties as the
cashier is responsible check the stock and
purchase the textbook.
The PO is incomplete as it does not
include all the necessary information.
The floor manager authorises the PO.
The PO is only generated in duplicate and
one department does not get a copy of the
PO.
There is no authorisation provided when
changes are made to the approved
supplier list.
The receiving clerk only inspects if the
correct quantity of the textbooks have
been delivered.
The GRN is incomplete as it does not
include all the necessary information.
The accounts and ordering department is
not informed if there were short
deliveries.
The quantity, quality and date on the
invoice is only compared against the GRN.
The accountant does not verify the price,
terms of payment and account details on
the invoice.
(SUGGESTED SOLUTION)
(14)
Marks Internal Control Marks
1 RBF should implement inventory levels to 1
govern the re-ordering level.
1 A separate person or purchasing 1
department should be employed.
1 There should be segregation of duties 1
between the person who generates the
requisition and places the order.
1 The PO should also include the following:
• Description of textbook;
• Discounts; and Max 2
• Signature of the buyer.
1 The purchase manager has to authorise 1
the PO.
1 The PO should be issued in triplicate and 1
1 one copy has to be kept in the delivery 1
pending register in order to be matched
with the delivery note (DN).
1 Changes made to the approved supplier 1
list should be done by senior
management.
1 The receiving clerk should also inspect the 1
quality of the textbook and if the correct 1
type of textbook has been delivered.
1 The GRN should also include the following:
• PO number; and Max 1
• Description of the textbooks.
1 The receiving clerk should inform the 1
accounts and purchasing department if
the correct quantity was not delivered.
1 The quantity, quality and date on the 1
invoice should also be compared to the
DN.
1 The accountant has to match the price, 1
terms of payment and account details on
 the invoice to the PO in order to ensure all
the details match.
Available marks 13 Available marks 15
Maximum marks 5 Maximum marks 9

b) With specific reference to “Payments made to wholesalers of textbooks”, identify the control
objectives that management want to achieve. For each identified control objective, provide an
example from the scenario. (8)

Control objective Marks Example from scenario Marks

Validity 1 Payments made to the wholesalers for the 1
purchase of textbooks, are supported by
payment requisitions, creditor
statements, creditor reconciliations, PO’s,
GRN’s, DN’s and invoices.
Authorisation 1 All the payments made are authorised by 1
two signatories who review and cancel
supporting documentation, before
approving payment.
Completeness 1 Payment advices are recorded 1
numerically and missing numbers are
followed up.
Accuracy 1 All calculations are reviewed by an 1
independent person before a payment is
made.
Recording 1 After a payment is made it will be posted 1
from the payment advice to the individual
creditors' account and the total to the
creditors control account.
Available marks 5 Available marks 5
Maximum marks 4 Maximum marks 4

c) With specific reference to “Production of stationary”, provide the test of controls you will perform
to ensure that the implemented internal controls are working as designed. (25)

No. Test of Control Marks

1. Select a sample of customer production orders (CPO) or inventory production orders
(IPO) and inspect that the document has been authorised by the production planning 1
department.

Select a sample of customer production orders (CPO) or inventory production orders

(IPO) and inspect that the document is pre-numbered. 1
2. Select a sample of production orders and inspect for the signature of the factory 1
manager as proof of acceptance of the request for production. 1
3. Enquire of the factory manager and sales personnel about the issuing procedures. 1
 Select a sample of raw materials issues slips (RMI) and inspect the documents are: 1
• pre-numbered; 1
• signed as proof of preparation by the production planning department, or the 1
production department or factory manager.

Enquire from the factory foreman about the procedures that are followed to follow up 1
on missing numbers of the raw materials issue notes.
4. Select a sample of customer job cards (CJC) or inventory job cards (IJC) and inspect that
raw materials allocated to the production process are listed accordingly. 1
5. Enquire from the raw materials store staff if they receive a copy of the daily production 1
report to compare with the master file records for that day.

Select a sample of daily production reports and inspect that:

• all raw materials issued to production are listed on the report; 1
• raw materials store staff have signed as proof of comparison to the master file 1
records for that day.
6. Select a sample of customer job cards and inspect that the time spent on each stage of 1
production is captured on the customer job card.
7. Select a sample of reconciliations and inspect that the time recorded on the job cards 1
corresponds to the total number of hours worked by production staff.

Enquire from the factory foreman on the process followed to account for any 1
differences.

Inspect for signature of the factory foreman to ensure that differences have been 1
followed up.
8. Observe that the factory foreman inspects each stage of production. 1

Select a sample of customer job cards and inspect for the signature of the factory 1
foreman as proof of authorisation for the next stage of production.
9. Observe that a quality controls inspection is performed before the goods are transferred 1
to the next stage.
10. Select a sample of completed customer job cards and inspect for signature of the 1
factory foreman as proof of authorisation for transfer of the produced goods to
inventory.
11. Enquire from sales staff on the procedures regarding safeguarding of inventory. 1

Observethe room where inventory is stored and verify that the room is always locked. 1

Observe the access of staff that can enter the locked room are only authorised staff 1
members.
12. Enquire from the sales manager on the procedures of periodic comparison of physical 1
quantities on hand to inventory records.

Observe proof of comparison by the sales manager. 1

 Perform test counts and compare it to the client’s comparison. 1
13. Enquire on the procedures regarding inventory write off. 1

Observe the inventory for damage. 1

Inspect and re-perform management’s calculation of the inventory write off. 1

Verify that this calculation has been performed in line with the company’s policy
regarding inventory write off. 1
Available Marks 31
Maximum Marks 25

d) With specific reference to “Sale of textbooks to students”, identify and explain the weaknesses and
for each weakness identified, provide a risk as a result of the weakness. (15)

Weakness Marks Risk Marks

There is no credit application process in 1 Credit can be given to customers who are 1
place. not creditworthy.
This can result in customers not paying 1
their accounts on a monthly basis,
creating cash flow problems for RBF.
This can result in RBF having a huge 1
amount of bad debt, which needs to be
written off.
The ISO is incomplete as it does not 1 The wrong textbooks can be delivered to 1
contain the description and price of the the student.
textbook. The wrong price can be paid for the 1
textbooks.
The cashier authorises the sale of 1 Sales can be unauthorised, which can lead 1
textbooks. to theft of textbooks. 1
This will affect the profitability of RBF. 1
Single copy of the DN is generated. 1 The student can deny that they received 1
their textbook, this can result in the
textbooks can be issued twice to the 1
student.
The DN is incomplete as it does not 1 The wrong textbooks can be delivered to 1
describe the textbooks. the student.
The security guards do not sign the DN, 1 The delivery person can steal some of the 1
they only check that the correct quantity textbooks.
has been prepared. Lack of accountability in situations where 1
orders are incorrectly delivered.
The quantity and the price from the ISO 1 The wrong quantity can be listed on the 1
are used to generate the invoice. invoice.
The wrong price can be listed on the 1
invoice.
1
 This can result in the student paying the 1
wrong price or paying too much or too
little for the textbooks.
The accountant reviews their own 1 Calculations can be incorrect. 1
calculations. Resulting in the students paying the 1
wrong amount.
The accountant can take some of the
money for themselves. 1
Available marks 8 Available marks 20
Maximum marks 5 Maximum marks 10

e) With specific reference to “Payments received from students”, provide the test of controls you will
perform to ensure that the implemented internal controls are working as designed. (10)

No. Test of control Marks

1. Select a sample of payments from debtors' accounts and inspect that they are supported 1
by:
• the receipts;
• the cash receipt summary; and Max 2
• the deposit slip.
2. Enquire and inspect a copy of the company policy on discounts. 1
Select a sample of debtors' payments and recalculate the discount according to company 1
policy and ensure that the payment meets the criteria.
3. Enquire with management regarding procedures for reviewing calculations. 1
Inspect documentation for management signature. 1
4. Re-perform the reconciliation of the debtors control account and follow any 1
discrepancies with management. 1
5. Select a sample of payments through to the debtor's account and inspect the details i.r.o. 1
name, amount, discount, date against the payment advice. 1
Available marks 11
Maximum marks 10

f) With specific reference to “New computerised system”, identify and explain the weaknesses. For
each weakness identified, provide internal controls which can be implemented to mitigate the
weakness. (25)

Weakness Marks Internal Control Marks

Generic password that is used by all staff. 1 A password should consist of at least the
following:
• Minimum of 6 characters; 1
• Alpha/numeric; 1
• Uppercase and lowercase 1
letters;
• Special characters 1
The password “RBF23” can be easily 1 The password should not be easily 1
guessed. guessed.

The password is not confidential as all sales 1 Passwords for each terminal should be 1
staff know the password. confidential.

It is clear that the password is never 1 Passwords should be changed on a 1

changed.
The same password is used to unlock all
three desktop terminals.
No review of hardware, as they have three
desktop terminals.
Antivirus software has expired.
regular basis.
1 Using the same password for all staff 1
members should be prohibited.
1 It is important to ensure continuous 1
monitoring and review of the functioning
of the computer hardware.
1 Install virus protection software. 1

Staff cannot scan downloaded files from 1 Test data files for viruses before opening. 1
customers for viruses.
No insurance as they are still searching for 1 They should have adequate insurance 1
the best deal. cover.
Backups are kept on site, in the manager’s 1 Back up files should be stored on a 1
office. 1 separate premise.

Backups should be stored in a fireproof 1

safe.
Back up has only been performed once. 1 Backups should be done regularly. 1

Backups should be done online/ real 1

Employees do not lock the desktop
terminals during periods of inactivity.
No detailed and tested disaster recovery
plan.
time.
1 Desktop should automatically shut down 1
after 5 minutes of inactivity.
1 Establish procedures and responsibilities 1
in the event of a crisis.

Prepare a list of files and data that 1

would need to be recovered.

Provide alternative processing facilities. 1

Plan, document and test the disaster

recovery plan. 1
Fire extinguishers have not been serviced 1 Adequate protection against the 1
since they have been installed. elements such as fire, thunder and
lighting.

Fire extinguishers should be in working 1

condition and available for use.
 The extinguisher should be tested to
ensure that it is operating effectively. 1
Available Marks 15 Available Marks 24
Maximum Marks 10 Maximum Marks 15

g) With specific reference to “Proposed App for RBF”, identify and describe the application controls
to ensure the input of information is valid and accurate. For each application identified, provide an
example from the scenario. (20)

Application control Marks Example from the scenario Marks

Validity of input
Access controls – using a username and 1 The student will be able to log into their 1
password to get access to the app. account by completing the following
mandatory fields:
• Username; and
• Password.
Accuracy of input
Matching by the computer – information 1 The system will then verify if the order 1
generated by the computer. number matches with a valid order
number on the system.
Exception reports - to ensure that 1 If no order number can be found an 1
management follows up on these reports. exception report will be printed to ensure
senior management follows up on the
error.
Field presence checks - Ensures all the 1 When the student has selected the 1
mandatory fields have been completed option “register” they will be required to
before moving to next step. complete the following mandatory fields:
• Name and surname;
• Email address;
• Contact number;
• Username; Max 1
• Password; and
• Confirm password.

After the registration was successful the 1

student will be able to log into their
account by completing the following
mandatory fields:
• Username; and
• Password. Max 1

The student will then have to read the

terms and conditions of the payment,
and select the tick box to accept the 1
terms and conditions of the payment.
 Should the student not select the tick box
the purchase will not be accepted
Formatting check - Ensures the fields have 1 Will ensure that the following fields are
been completed in the correct format alphabetical:
• Name and surname; 1
• Username; and 1
• Email address. 1

Will ensure that the following fields are

numerical:
• Contact number. 1

Will ensure that the following fields are

alphanumerical:
• Email address; and 1
• Password. 1
Validity or existence check - Ensures that 1 The app will ensure that the email 1
the codes or files on the database does address actually exists.
exist
The app will ensure that the contact 1
number actually exists.
Dependency check - Ensures that there is 1 The app will ensure that the username 1
interdependency of input with other fields and password matches before granting
the student access to their account.

The app will ensure that the one time pin 1

Field size check - Ensure that the number
of characters enter into the required fields
are correct.
matches send to the cell phone number
matches the payment that has to be
made.
1 The app will ensure that the contact 1
number has the required number of
digits.

The app will ensure that the password 1

has at least 8 digits.
Screen prompts - Ensures a message will 1 A pop-up message will appear informing 1
“pop up” and ask the user whether he the student if their account has been
wants to submit the on-line form. registered or not.

If the username and password does not 1

match a pop-up message will appear
indicating the error.

If the onetime pin does not match, the 1

payment will not be processed and an
error message will appear.
 Specific character check - Ensure that 1 The password should contain at least one 1
should the field require a specific special character.
character that it will be entered.
The system will also ensure that the 1
password contains a @ sign.
Logic check - Ensures that the totals has 1 The system will then ensure that the total 1
been added up correctly. price has been calculated correctly
Staff Training - All the users need to be 1 All of the employees at RBF will receive 1
given training on how to use the system. training to ensure they understand how
Operating and instruction manuals should the app functions.
also be provided. There will also be operating manuals and 1
instructions available to all employees
Note to marker: The student has to identify
and explain the application control in order
to get the mark. If a student only lists the
application control, NO marks are awarded.
Available Marks 12 Available Marks 28
Maximum Marks 10 Maximum Marks 10
Precision and Interpretation marks (3) (ALL students to receive these marks)