OPQ Audit Firm Was Planning the Audit for Its Existing

question 10

Essay

OPQ Audit Firm was planning the audit for its existing client, Alpha & Beta Corp.The audit partner was trying to determine the best audit strategy to use.Alpha & Beta Corp is a small retailing company that does not have any warehousing facilities as all stock is kept on the premises.Being small, they only have a small team of staff, which makes the separation of duties principle difficult to achieve.The preliminary tests of controls found that the internal control procedures are well designed, but not always observed due to the small amount of staff.Previous experience with this client also showed that controls were not always observed.Despite this, OPQ has never discovered a material misstatement in the accounts.
Required: determine what audit strategy should be used and justify your answer.

---

Definitions:

Performance-Contingent Rewards

Rewards or incentives that are given to employees based specifically on their performance or achievements.

Positive Reinforcement

Strengthens a behaviour by making a desirable consequence contingent on its occurrence.

Force-Coercion

A change strategy that involves using power to induce change through pressure or the use of authority, often leading to compliance but not necessarily agreement.

Political Manoeuvring

The strategic and often subtle actions taken within organizational or governmental contexts to gain advantage, influence decisions, or achieve specific outcomes.