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Business Law and Accounting ControlMock Assessment
Questions
Study phase 2
Mock assessment question 1 (Topic: Internal control and accounting
systems)
Question 1: Internal control
Part A:
The following information relates to accounting control.
COLUMN A COLUMN B
1. Materiality A. Can be time-consuming without the use of a computer.
2. Monetary Unit Sampling B. Designed to obtain evidence about financial statement assertions.
3. Audit sampling C. Limits the risk of fraud being perpetrated.
4. Tests of control D. Calculated at all stages of an audit.
5. Audit tests E. Comparing internal data with external sources.
Characterised by corporate culture, management style and
6. Custody of assets F.
organisational structure.
7. Segregation of duty G. Inherent limitations may render them less than 100% efficient.
8. Control activity H. Maintenance of proper accounting records for all assets.
© EDGE Learning Media (Pty) Ltd – 1
,Business Law and Accounting Control Mock Assessment Questions Study Phase 2
9. Financial reporting system objective I. Established controls over journal entries.
10. Control environment J. Applying audit procedures to less than 100% of the audit population.
Required:
Match the items listed in Column B with those in Column A. Write down only the letter of your choice
next to the corresponding number. For example: 1. A
2. B
3. etc.
Part B:
Describe the following:
(a) Control environment
(b) Financial reporting information systems
(c) Tests of control
Question 2: Accounting systems – Expenditure cycles
Steps Traders (Pty) Limited operates a computerised purchase system. All invoices and credit notes
are captured and processed by the purchases department. The computer automatically raises a
payment requisition when the invoice is due for payment.
Required:
List the internal controls that should be operating over purchase invoices and credit notes to ensure that
only authorised purchase invoices and credit notes are posted to the purchase ledger.
Question 3: Accounting systems – Stock control
Your firm is the auditor of Honey (Pty) Ltd. You have been asked to conduct audit checks of cut-off and
attending the stock count at the year end.
Electronic records are maintained of inventory quantities. Honey carries out inventory counts on a
monthly basis, focusing on fast moving and high value items, with remaining items being counted on a
rotational basis throughout the financial year.
You attended the inventory count at the year-end date. You received a print out, from the system, of
the stock list at the count date, detailing quantities and values of inventories.
© EDGE Learning Media (Pty) Ltd – 2
,Business Law and Accounting Control Mock Assessment Questions Study Phase 2
Required:
(a) Explain the key matters you checked and recorded when you attended the inventory count.
(b) The checks you would perform in checking that cut-off was correctly carried out at the year-end
audit.
© EDGE Learning Media (Pty) Ltd – 3
, Business Law and Accounting Control
Mock Assessment
Questions
Study phase 3
Mock assessment question 1 (Topic: Multiple choice questions)
Choose the most appropriate alternative from the options provided at each of the following questions.
Write down only the letter of your choice next to the corresponding number. For example 1.1 (F)
1.1 Acts such as the National Credit Act and the Intermediary Services Act:
A are legally promulgated
B are not legally promulgated
C are not formally gazetted
D are not useful in making the economy empowered
1.2 The "unspoken" laws of business includes:
A basic laws of economics such as scarcity
B enacted statutes such as the National Credit Act
C all enacted and yet to be enacted statutes and regulations
D complex laws of economics such as marginal propensities
1.3 Acts and statutes are put in place to:
A encourage political collusion
B allow the South African Revenue Service to maximise their tax revenue at the expense of
economic stability
© EDGE Learning Media (Pty) Ltd – 1
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