SECTION A

You must answer this question

Question 1

Tina Rabbit produces costumes for theatre productions.  Tina orders 3 pairs of boots from the Lancaster branch of Shoes-4-U. The Lancaster branch only has 2 pairs of the boots in its physical inventory and will have to arrange for the remaining pair to be sent to them from the Shoes-4-U central warehouse. Tina will pay for all three pairs now by credit card and take away both of the pairs of boots that are available.  The Lancaster branch of Shoes-4-U will notify Tina when the remaining pair is available for collection.

(a)         Identify six items of data that Shoes-4-U would put on the sales order record for this

transaction.

(6 marks)

(b) Describe in detail the four pick, pack and despatch processes that will take place at the central warehouse of Shoes-4-U.  You should explain what happens in each process and identify what business data is amended.

(12 marks)

(c) Explain what credit checking process Shoes-4-U would apply to Tina Rabbit for this transaction and justify why this is the appropriate process .

(4 marks)

(d)   One of the objectives of an auditor for the revenue cycle is to ensure that existing sales transactions are fully recorded. Identify two controls that Shoes-4-U should have in place to meet this objective and, for each one, suggest a test of the control that an auditor may use in their work.

(8 marks)

Total for Question 1: 30 marks

SECTION B

Answer TWO questions from this section

Question 2

(a)        What is fraud?   You should provide a comprehensive definition of fraud and use the

details of two specific real world examples of fraud to illustrate your answer.  You are not required to discuss the fraud triangle in your solution.

(11 marks)

(b)        How is social engineering used to perpetrate computer-based fraud?  You should explain

what social engineering is, why people fall victim to this approach and describe seven specific social engineering techniques.

(24 marks) Total for Question 2: 35 marks

Question 3

(a)        What are the three key regulatory elements of external audit?  You should identify and

describe each element and explain why it is an essential part of the audit process.

(15 marks)

(b)        Individuals employed by audit firms are normally subject to the firm’s professional code

of conduct.  Describe and discuss four expectations of the behaviour of an auditor that you would propose for a professional code of conduct.  You should describe what the requirement is for the individual employee and clearly explain why you would propose that this requirement be included in the code.

(20 marks) Total for Question 3: 35 marks