Unisa Assignment 2: 764874

Nonkululeko Nhlapo

Student number: 49301462

Answers

1.1 The Act that the United States of America would need to comply to is the Sarbanes-Oxley Act
(SOX).

1.2 The main purpose of the Act is to ensure that shareholders of companies are protected when it
comes to the accuracy of financial statements. The financial statements must be falsely
presented. This will reassure the investors that the financial information is truthful and reassure
them that it has been verified by an independent third party.

1.3 No, it is not good for FurnCo to continue with their intention to list their company in the USA as
there were discrepancies found with their financial reports.

2 The six characteristics of ethical leadership are:

Responsibility, Fairness, Accountability, Transparency, Integrity and Competence.

3 Economic transformation – meeting their obligations in order to help the country’s economy to
develop.
Fair treatment of customers – treat customer fairly and not show favoritism based on race,
culture, gender or level of status.
Fair labor practice – treat all employees fairly and adhere to labour laws.
Prevention, detection and response to fraud and corruption – install internal controls that will
help prevent fraud, identify fraud and have measures set on how to deal with those incidents.
Responsible tax policies – adhere to the applicable tax regulations in the country.
Employee wellbeing and development – look after their staff in terms of benefits offered by the
company such as medical aids and have professional development plans for deserving
employees.

4.1 General IT controls – general IT controls govern the design, security and use of computer
programs in an organization. They also govern the security of data files. An example would be the
development and implementation of an information system security policy.

Application controls – application controls are those controls that relate to the scope of
individual business processes of application systems including data edits and error reporting.
Example would be ensuring that data is accurate, complete and authorized.

5.1 b) Recording of sales and raining debtors - Revenue and receipts cycle, and the main objective is
the creation of a sales record such a Sales Journal and to indicate the amount owed by each debtor.
 c) Credit management – Acquisition and payments cycle, and the main objective is reducing the
risk resulting from bad debts.

d) Ordering of good -Acquisition and payment cycle, and the main objective is to initiate the
placing of orders for goods or services with the suppliers.

e) Warehouse/ dispatch – Receipts and revenue cycle, and the main objective is to effectively
control the transferring of goods in and out of all warehousing facilities and to protect the inventory.

f) Receiving goods – Acquisition cycle and its purpose is to receive good s ordered from suppliers
and to acknowledge the acceptance of the goods on behalf of the company.

g) Recording of purchases (acquisitions) – Acquisition cycle, and the purpose is raising the
purchase and the creditor relating to that purchase.

h) Receiving and recording payments from debtors – Revenue and receipts, this involves
collecting the payment from the debtors and recording it in the appropriate journal.

i) Actual payment and recording of the payment – Acquisition cycle, this department is
responsible for preparing the actual payment and recording it in the accounting records.

j) Invoicing – Revenue and receipts, this step involves notifying the customer of the amount
owed for the goods they have purchased. The invoice may be sent together with the goods
purchased or it can be done at a later stage.

k) Payment preparation - Acquisition and payment cycle, this department will be responsible for
determining what amount is to be paid to the creditor and confirming that the payment is valid as
well as preparing the relevant documents that are required to be authorized.

5.2 ii) Shading of fields – accuracy

iii) Mandatory fields – accuracy

iv) Mandatory fields – accuracy

v) Shading fields – accuracy

vi) screen dialogue and prompts – validity

vii) Shading of fields – accuracy

6. 1the physical controls that the company could have used are as follows:

• Entry and exit

• Controlled entry and exit
• Restricted entry
• Secured buildings
• Environmental
• Surveillance
6.2 Type 2

7.1 The employee Masterfile consists of sensitive and important information which if not controlled
can lead to negative results for the company. All changes to the Masterfile should be recorded on a
hard copy Masterfile amendment form, the Masterfile amended form should be signed by two
seniors and cross referenced to the supporting documentation. Access to the Masterfile should be
restricted by use of user ID and passwords. The logs should be reviewed on a regular basis by senior
personnel.

7.2 The maximum password age is a long period.

Minimum password length is too short

Password meeting complexity requirements is disabled when it should be enabled

Encryption of using password is disabled

The threshold for account lockout is too long. The attempts should be lessened.
User must change password at first logon is disabled

Showing characters when signing on is enabled, anyone can see the password.

The allowance of the same password for all users is a risk.