JHU is a retail chain that has 20 shops JHU's Internal Audit Department has just completed an investigation into the operation of controls over credit card payments by shop customers In 12 cases, the shops were complying with JHU's standard procedures The other 8 shops had serious deficiencies that differed between shops.
The Internal Audit Department has drafted a detailed report on the outcome of the audit visit carried out at each shop, but has not yet submitted them to senior management.
Which TWO of the following statements are correct?

• A. Draft reports should be discussed with their respective shop managers, who should have the opportunity to comment before the reports are submitted to senior management
• B. All 20 reports should be placed on JHU's intranet so that every shop manager can learn from good and bad practices noted at each shop
• C. The reports relating to the deficient shops should set a deadline for their systems to be rectified and a follow-up audit visit carried out
• D. It would be a mistake to submit the reports relating to the 12 shops that were in full compliance to senior management
• E. The Internal Audit Department should consider editing the concerns arising from the investigation in order to avoid demotivating the shop managers

You are the management accountant for YY a food manufacturing company with an annual sales revenue of
$6 million
You discover that the production manager's records are inconsistent Raw materials purchased do not agree with the total recorded for transfers to production plus wastage There is an average shortfall of 2% of purchases You have investigated and discovered that there are often errors made during manufacturing that results in food that is safe to eat but. because of visual flaws, cannot be sold The production manager is supposed to scrap all such damaged products and write all such losses off as waste You have discovered however that he has been giving the damaged food to a charity that assists homeless people No records are made of such gifts in order to conceal the losses due to manufacturing errors Which of the following actions should you take? Select ALL that apply

• A. Instigate a confidential but documented review with the production manager and tell him to stop
• B. Instigate a review of the production process to potentially reduce the amount of wastage.
• C. Instigate disciplinary action this is both theft and poor management
• D. Do nothing; this is a good cause and the amount is insignificant
• E. Instigate a process whereby edible but unsellable items can be given to the charity officially

Y plc, a pharmaceutical company, has dealt with a number of risks in the manner indicated below.
Use the TARA framework to classify each of Y plc's responses.

GUJ A small but rapidly expanding company has recently opened several branches in locations far away from the Head Office. All of the branches are relatively small with no one branch accounting for more than 5% of turnover. Management has decided that the company is not yet large enough to install an Internal Audit function but is, nonetheless, concerned about maintaining adequate control and monitoring at the branches whilst allowing Branch Managers the opportunity to react to local circumstances as appropriate.
Which of the following measures would assist Head Office management in maintaining appropriate monitoring and control at the branches?

• A. Restricting the autonomy of individual Branch Managers to purely routine matters and instructing them to refer everything else to Head Office.
• B. Establishing an open communication policy for employees at branches to allow them to contact Head Office on any matter that concerns them.
• C. Instituting the use of a formalised budgetary control system at head office for all branches.
• D. Dealing with all Human Resource, recruitment, and similar issues directly from Head Office.
• E. Arranging visits by senior management to each branch periodically.

A consultancy firm has many overseas clients The firm's staff are responsible for booking travel and accommodation through an independent travel agent who invoices the firm. There are strict rules governing bookings Staff at all levels must book economy class airfares unless the scheduled flight time is greater than eight hours, in which case they can book a business class seat Hotel accommodation should cost less than $300 per night One of the firm's directors is visiting the consultancy team responsible for a large overseas project The director flew business class, even though the flight took only five hours The director is booked into an executive suite at an expensive hotel at a cost of $900 per night Which TWO of the following statements concerning the director's behavior are correct?

• A. In future, all staff should be permitted to fly business class and use more luxunous hotels
• B. The travel agent's invoice should be queried by the consultancy's administrative staff.
• C. Directors are not required to adhere to company policies in the same manner as more junior staff
• D. Only the staff engaged on this project will be aware of the director's behavior
• E. Staff may be encouraged to book more expensive flights and accommodation in the future