ACCA · Question 08 · 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:
Identify the primary risk arising from the warehouse manager's responsibilities in the purchases cycle.
Answer options:
The company may fail to take advantage of bulk purchase discounts.
The manager could order goods for personal use, receive them, and authorize the company to pay for them.
Suppliers might deliver the wrong drone parts, causing production delays.
Purchase invoices might be recorded in the wrong accounting period.
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