Reference no: EM132461228

You are the senior in charge of the audit of Bimha Investments Corporation Plc, a manufacturing company. You have been talking with the payroll supervisor who has commented on the strength of the company's payroll internal control system. She has assumed that this internal control system guarantees the completeness, accuracy and validity of the payroll accounting records.

REQUIRED:

Problem (a) State whether you agree with the supervisor's assumption that an internal control system can guarantee the completeness, accuracy and validity of the records, supporting your answer by using examples from a payroll system.

Problem (b) The supervisor has also asked you to explain some internal control terminology which she does not understand. Explain the meaning of the following terms, using payroll examples different from those you have given above:

(i) Segregation of duties;

(ii) Arithmetical and accounting controls.