B.

to control TUPL could implement following measures for reducing each of the deficiencies :

a. update the website ,that shows all the inventory within the system that are available and which
are out of stock on proper time.

test control is
testing the data by ordering the items which are out of the stock, the ordered items should be
showing sign as being out of stock and shows time of available.

b. TUPL should remind couriers to take customer signatures after delivering goods as a proof of
despatch. TUPL should also remind that any document without sign may lead to the unpaid for
despatches.

ask TUPL for checking the signatures of customer by collecting different sample of despatches by
couriers

c. credit limit duties should be assign for higher level or senior member of the sales department not
by the clerks. similarly, all the transaction should be viewed on the regular bases by responsible
officers.

makes sure that sales clerk could not see or have the information regarding the credit limit. on the
other hand, take a sample of new customer who are being limit authorised for credit limit and
review their credit limits and making sure that all work are performed by right person.

d. only person with the authority should access the purchase ledger like purchase ledger
supervisor. the master file data could be controlled by passwords.,

any changes to purchase ledger should be review by the responsible person. and make sure that
the purchase ledger clerk could not make any changes.

e. proper review of the machinery items should be done by the person holding high responsibilities
or by senior for recognising the old equipments. the old equipments should be repaired well and if
it could not be repaired it should be replaced.

each replaced equipment should be mentioned and senior member should be identifying and
making treatment of old equipment by doing proper observation during review process.

https://www.acowtancy.com/exam-centre/acca-f8/9b8347df-73d7-c7fb-f701-202bcbfa5555

Part D (10 marks)

event description impact of materiality explanation

1 Resign by finance - decrease Since the financial

management and no manager resign in rush
financial manager has and there is no one as
been found. financial manager who
handles all the financial
data. As a result there is
possibility for
misstatement because
financial manager may
use different method to
classify the expenses
and profit of the
organisation and auditor
might need some time to
understand the methods
as a result there could be
errors in materiality.

2 Resign by HR manager No impact Human resource has

and new manager is great importance for
appointed. running the organisation.
Human resource is
controlled by HR
managers as a result
when there is no
manager there would not
be any control, however,
human resources does
not deal with financial
statement and a new HR
manager has been
appointed which makes
no impact on materiality.

3 Detect error while increase The error has been

transferring data from detected and manager
SuperD to SuperB and also confirmed the error
management confirmed will be fix which helps
the error will be fixed. rectifying the financial
statement.
event description impact of materiality explanation

4 Among 40 samples decrease There is no list on which

selected for testing, 14% item the business invest
does not have purchase money as a result
document and the without documentation of
reason behind the case purchase items the
was due time period financial statement can
which is taken by the not be have accurate
Dune Ltd and other result. Financial
entities. statement could be
manipulate through miss
place of accounts
payable and wrong
entries of cash may be
there. Material
misstatement could be
take place so, it is
important that the auditor
increase sample size
because there is
possibility of population
misstatement is greater
than the sample size
(ASA 30 para 23 )

https://www.legislation.g
ov.au/Details/F2006L013
89