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internal control weaknesses
Its given in the answer there was no need for second signature i cannot understand as there was no hint of second signature in the question …Second point that failure to deal with products that failed….
Yaya relied on jane goo to dispose of the products..it did not insist that the goods were returned and disposed of independently…i cannot understand this point also please explain with refrence to internal control weaknessesQ1 – See 3rd paragraph, last sentence
Q2 – All assets of a company need to be safeguarded appropriately. ‘Failed’ products are assets, yet it seems that there was no control over the disposal of these assets. Even if they had failed they might have had a substantial scrap value. Here, of course, as soon as a product was marked as failed the company lost interest in it entirely, allowing the fraud to take place.
Similar problems have been found in engineering companies where metal is drilled and cut. These operations produce waste metal (swarf) which can have a substantial value. It is important that control is established over this waste and its sale.
Sir i read the 3rd para last sentence its written a single signature on a product compliance report was required to pass or fail in QC ….SO is the answer saying that there was a need for second signature to ensure that report has been checked by an independent quality control officer ?
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