ACCA · Question 07 · Audit and Assurance
CASE 2: AGRIGROW TECH LTD
AgriGrow Tech Ltd develops automated drone-based irrigation systems. They employ 500 seasonal workers during peak harvest. The payroll master file is updated by the HR clerk, who also processes the weekly payroll run. Seasonal workers are paid in cash. The warehouse manager orders drone parts, receives the goods, and authorizes the purchase invoices for payment. AgriGrow recently implemented a new cloud-based inventory system, but the IT manager left, leaving the system with no password complexity requirements.
QUESTION:
Which of the following would be the MOST effective internal control to mitigate the risks associated with paying 500 seasonal workers in cash?
Answer options:
The HR clerk should personally hand the cash to each worker to ensure they know who is being paid.
Workers must present photographic identification to an independent supervisor who distributes the cash pay packets and requires a signature upon receipt.
The total cash withdrawn from the bank should exactly match the net pay total on the payroll run.
Cash should be left in individual envelopes in the staff breakroom for workers to collect at the end of their shift.
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