Tag: Ethics

Alex Maintenance Ltd is a large property management company that uses many contractors for building, design, and decorating.

Which ONE of the following internal controls are most likely to prevent services from being used for the private purposes of employees?

Select ONE answer:

1. Purchase orders should only be placed with authorised contractors
2. Purchase invoices are matched to authorised purchase orders
3. Purchase orders are processed by the buying department following authorisation by the operations director
4. Purchase requisitions must be signed by ONE team member for any given project

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – 1 is not correct as inappropriate orders could still be made with authorised suppliers. 2 is not correct as once inappropriate orders have been authorised, matching the order with the invoice will not prevent that act having taken place.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is a process that makes up the purchasing system at Alex Manufacturing Ltd.

For this process, select whether it represents a Big Strength, Big Deficiency, Small Impact or No Impact on the purchasing system.

• Payments are made by direct transfer. The direct transfer list is authorised by the financial controller, who checks the payments t o supporting documents, such as the invoice or service agreement.

Select ONE answer:

1. No Impact
2. Big Strength
3. Small Impact
4. Big Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct ==> Strength – payments authorised
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is a process that makes up the purchasing system at Alex Manufacturing Ltd.

For this process, select whether it represents a Big Strength, Big Deficiency, Small Impact or No Impact on the purchasing system.

• Invoices for services are checked against the service provider’s proof of delivery, which is requested from each service provider.

Select ONE answer:

1. Big Strength
2. No Impact
3. Small Impact
4. Big Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – ==> Strength – company only recognises liability for services received
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is a process that makes up the purchasing system at Alex Manufacturing Ltd.

For this process, select whether it represents a Big Strength, Big Deficiency, Small Impact or No Impact on the purchasing system.

• Orders are placed by department heads, usually by telephone, when they determine a service is required.

Select ONE answer:

1. No Impact
2. Small Impact
3. Big Strength
4. Big Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – ==> Deficiency – there is no proper authorisation of payment orders.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Bash and Co, the auditor of Alex Manufacturing Ltd., has identified the following deficiency within that business’s accounting system.

For the deficiency identified below, select the MOST likely consequence which might arise because of this deficiency.

• Invoices are not checked against the original orders.

Select ONE answer:

1. Sales receipts
2. Sales invoices
3. Goods dispatch notes
4. Sales orders

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – The checking of invoices to orders will reduce the risk of accepting invoices for goods or services which were not ordered.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.