Reference no: EM132757181

You are the audit senior on the Gemstone Ltd audit for the year ended 30 June 2018. Gemstone manufactures a wide range of jewellery. Orders are received by the sales order department by mail, fax, email or via a sales representative and are passed on to the credit manager for his review of the credit limit and approval of the order. Once approved, orders are returned to the sales order department where data-entry clerks key in the order via the terminals located in that department.
Orders are subject to various computer edit checks when they are input at the terminal. If orders satisfy all the computer edit criteria, a picking slip is produced that lists the goods ordered. Orders that fail any of the computer edit criteria are not accepted by the system. Rejected orders are noted by the data-entry clerk and passed to the department's supervisor for investigation.

• Picking slips are printed in the dispatch office and then forwarded to the warehouse by the dispatch supervisor. A storeperson picks and assembles the orders. If goods are not in stock the storeperson alters the picking slip quantity to reflect actual goods picked. The storeperson then initials the picking slip prior to forwarding it together with the goods to dispatch. The dispatch clerk agrees the picking slip to physical goods picked, making adjustments for any stock-outs, before printing the invoice, which is forwarded to the accounts department.

REQUIRED

Problem 1: Identify the key controls and determine an appropriate test of controls you would employ for each control