Lake Hardware Wholesalers Assignment | Top Universities
Budd, the purchasing agent for Lake Hardware Wholesalers, has a relative who owns a retail hardware store. By issuing a Lake Hardware purchase order, Budd arranged for hardware to be delivered by manufacturers (Lake Hardware vendors) to his relative’s retail store on a C.O.D. (cash) basis. This allowed Bud’s relative to buy at Lake's wholesale prices.
A) Describe two (and only two) specific controls that Lake Hardware should have in place to prevent or detect this situation in a timely fashion.
B) Describe two (and only two) specific tests of controls audit procedures to determine the operational effectiveness of the controls you named in (A).
C) Describe two (and only two) specific substantive audit procedures that would detect the situation described.
No credit will be given for generic answers (e.g. policies and procedures; separation of duties without specifics; discuss with management). Be specific! Get Accounting Homework Help Today.