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Hello tutor!!
In the sales process of this question, credit controller is on maternity leave and credit limits are set by sales director.
I thought this would be a deficiency but in answer it is fully satisfied for credit limit to be set by sales director. Why ?Why a deficiency? surely a director is the most suitable authority? And better sales than production, say, because that is within their field of expertise.
Because sales director might be face familiarity threat in order to allow credit limit to his/her familiar customers. That’s why I thought.
The Code of Ethics and Conduct applies to “professional accountants” and threats to independence/fundamental principles arise through audit engagements (for example). This topic has nothing to do with systems of internal control.
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