Question 1
St Kilda Pty Ltd is a retail business selling marine products such as anchors, bilge pumps, marine lights, boat hatches, etc. It sells its goods through a network of stores across Australia as well as using a website to sell goods online. In order to buy online, customers must have previously registered and created a St Kilda customer account with a unique username and password.
The following describes the pick, pack and ship goods process of the revenue cycle of St Kilda Pty Ltd for online sales:
Process 3.0 – Pick, pack and ship the goods
At 7 am daily, the warehouse officer collects the shipping notices from the shipping manager. Each shipping notice label contains the customer name and address, and details of the items ordered by the customer. The warehouse officer packs the individual items into a box and seals it. The warehouse officer attaches one copy of the shipping label to the box and initials and dates the other copy. Once all the packing has been completed, the warehouse officer leaves the packed goods on the delivery dock for the Australia Post courier to collect. The warehouse officer gives the signed copies of the shipping notices to the shipping manager. Before leaving for the day, the shipping manager enters the shipping notice number into the computer and ticks a box that says ‘order complete’. The computer updates the sales order states to ‘4’ (goods shipped).
The document flowchart of Process 3.0 – Pick, pack and ship the goods is shown on the following page:
Required
- Identify and describe three (3) risks that are present in the pick, pack and ship process.
- Identify any three (3) controls that are present in process, explain their operation and the risks that they address.
- Identify three (3) risks that do not have relevant control activities and discuss the internal control activity that would be appropriate to address the risk.
Question 2
In each of the following cases, identify and explain a preventive, detective and/or corrective control which would best mitigate (reduce) the threat. Note, you must identify whether a preventive, detective and/or corrective control is needed, identify the control needed and explain it.
Case A
An employee’s laptop was stolen at the airport. The laptop contained personal information about the company’s customers that could potentially be used to commit identify theft.
Case B
An employee received an email purporting to be from her boss informing her of an important new attendance policy. When she clicked on a link embedded in the email to view the new policy, she infected her laptop with a keystroke logger.
Case C
A company purchased the leading ‘off-the-shelf’ e-commerce software for linking its electronic storefront to its inventory database. A customer discovered a way to directly access the back-end database by entering appropriate SQL code.
Case D
Once an attack on a company’s website was discovered, it took more than 30 minutes to determine who to contact to initiate response actions.
Case E
An employee picked up a USB drive in the car park and plugged it into his laptop ‘to see what was on it’. As a result, a keystroke logger was installed on that laptop.
Required
In each of the cases, identify and explain a preventive, detective and/or corrective control which would best mitigate (reduce) the threat. Note, you must identify whether a preventive, detective and/or corrective control is needed, identify the control needed and explain it.
Question 3
Geelong Fashion Pty Ltd is an Australian retailer of fashion clothing. The following provides a description of the receiving inventory process of the expenditure cycle for Geelong Fashion Pty Ltd:
Receiving Inventory
The delivery driver delivers the goods, along with two copies of a delivery docket, to the warehouse officer. The warehouse officer checks that none of the cartons looks damaged and that the number of cartons is correct, and then signs both copies of the delivery docket. The first copy of the delivery docket is returned to the delivery driver. The warehouse officer retrieves the matching purchase order from their ‘awaiting goods’ file and opens each of the cartons to verify that the correct number of products have been delivered. Once the goods have been checked, they are placed in the packing room, which is a small area close to the loading dock, designed to be readily accessible from both the warehouse and the loading dock. The purchase order is attached to the second copy of the delivery docket and filed in a ‘goods received’ file.
Required
Prepare a document flowchart for the receiving inventory process of the expenditure cycle of Geelong Fashion Pty Ltd.