Question

You have recently been appointed as an audit assistant for MKZ Auditing LLC, a popular auditing firm based in Al Ain. Your line manager spoke to you two weeks ago to inform you that you have been assigned to another senior auditing staff to undertake a visit and audit a client called SMC Hotels LLC.

Your line manager has tasked you to liaise with the senior auditing staff to prepare a presentation to be delivered to the senior management on how you propose to investigate and plan the audit of SMC Hotels LLC.

Required
State any two (2) possible significant weaknesses in control that may arise in SMC Hotels LLC . ( In your Own Words)

Answer 1

Two possible significant weakness in control that may arise in SMC Hotels LLC are as follows:-

1. Segregation employee duties:- Segregated employee duties, particularly in handling money. If one person is responsible for handling all the money from receiving it to depositing it in the bank you taking a big risk that it could be handled inappropriately.

2. Robust physical security:- Robust physical security as in locks, alarms, cameras and limited access to SMC Hotels LLC.