ACCA F8 - Audit and Assurance Revision Kit 2016

(d)
Additional assignments for internal audit
Testing of controls over cash
Retail stores have a significant amount of cash at each shop and need robust controls over the cash receipts
process. Internal audit could test the design and operation of these controls at each store on a periodic
basis. They could also conduct cash counts at the same time they carry out inventory counts.
Fraud investigations
A retailer such as Greystone with large sums of cash and desirable, easily moveable, inventory is more
susceptible to fraud than many other businesses. Internal audit assignments may therefore include
reviewing the fraud risk areas and suggesting controls to mitigate these risks. Where fraud is uncovered,
internal audit could also investigate these instances of fraud.
Value for money review
Internal audit could undertake value for money audits examine the economy, efficiency and effectiveness of
activities and systems, such as the just in time ordering system recently introduced.
Overall review of financial/operational controls
Internal audit could undertake reviews of central controls at head office, making recommendations to
management over, for example the sales, purchases and payroll systems.
Review of information technology (IT) systems.
Greystone may have complex computer systems linking tills in the stores to head office. If internal audit has
an IT specialist, they could be asked to perform a review over the computer controls for this system or other
computer systems.
Compliance with laws and regulations
Like all businesses, Greystone will be subject to law and regulation, which will vary depending on the part of
the world a store is operating in. The internal audit department could review compliance with these laws and
regulations.
Top tips. Six other assignments were needed for full marks. An alternative you may have come up with is
the assignment of an internal auditor to test the customer experience in stores by posing as a customer. The
level of perceived customer satisfaction is then fed back to each shop to improve customer service and form
the basis for any further training that is required.
Answers 117