PART A
(a) Identify three account balances which are at risk of misstatement
(b) Identify two internal control weaknesses relating to each account balance identified at (a).
(c) Based on the control weaknesses, evaluate the control risk (High/Medium/Low) relating to each of the three account balances identified. Upon evaluating all three account balances, decide the most appropriate audit strategy (test of controls or test of details) required for each account balance.
(d) Provide the assertions at risk for each account balance as a result of each internal control weakness identified in (b). Explain your answer.
PART B
(a) For each of the internal control weaknesses identified in Part B, outline the substantive procedure (test of detail) that is specifically responsive to the audit risks caused by each internal control weakness. Include the type of documentation you would request from the payroll clerk in order to undertake the procedure.
PART C
(a) Based on the above please make four recommendations to management on completion of audit.