Smackcey Food

Q 4.

Information and communication internal control is set of manual and/or computerized procedures that initiate, records, processes, and report's an entity's transactions and maintains accountability for the related assets. When the auditor was doing the fieldwork, he saw that one of the employee put the return sales in the dumpster and during the lunch break will take it out from the dumpster and put in Henry's car. So that means Henry dose not record the returned sales in the system, which implied that Smackey's Company internal control is weak. Therefore, the control risk is too low, and monitoring activities to assess the internal control by the management is so poor and adequate.

Q5.

The primary purpose of account receivable conformation is to satisfy the existence, accuracy, and cutoff objectives.

Types of account receivables confirmation are:

Positive confirmation: is a letter addressed to the debtor, requesting a response that the recipient indicate directly on the letter whether the stated account balance is correct or incorrect, if incorrect by what amount. There are two types of positive confirmation forms are blank confirmation form and invoice confirmation.

Negative confirmation: is a letter addressed to the debtor, requesting a response only if the recipient disagree with the amount of the stated account balance.

I would use the positive confirmation because I am dealing with new client, be able to follow up if the venders did not response, and better evidence for the auditor because the auditor will have a legal confirmation letter on hands, to make sure the company