Barnings is a large hardware chain that is affected by COVID19. Customers place orders via the website. They can pay using their credit card or PayPal. When customers place an order, they are given an order number that they are advised to write down. When the order is ready to collect, their credit card is charged and at this point they receive an email with their order details. Customers then turn up at Barnings and provide their name to the click and collect staff member in the car park. There is no ID check to confirm it is their order.

For orders for goods that are not currently in stock - the order remains open and the customer is not charged. Once a week the Store Manager reviews the open orders that are waiting for goods out of stock and places an order with Head Office for those items. It can take up to 2 weeks for the goods to arrive in the store. Then when the order is ready to collect - the credit card is charged and the customer receives an email. There is no way for the customer to check the progress of their order or if goods are out of stock at their local store.

The head office sets all of the prices for items on the websites and there are no store specials.

Which of the following is a control activity?

Question

Barnings is a large hardware chain that is affected by COVID19.  Customers place orders via the website. They can pay using their credit card or PayPal. When customers place an order, they are given an order number that they are advised to write down. When the order is ready to collect, their credit card is charged and at this point they receive an email with their order details. Customers then turn up at Barnings and provide their name to the click and collect staff member in the car park. There is no ID check to confirm it is their order.

For orders for goods that are not currently in stock - the order remains open and the customer is not charged. Once a week the Store Manager reviews the open orders that are waiting for goods out of stock and places an order with Head Office for those items. It can take up to 2 weeks for the goods to arrive in the store. Then when the order is ready to collect - the credit card is charged and the customer receives an email. There is no way for the customer to check the progress of their order or if goods are out of stock at their local store.

The head office sets all of the prices for items on the websites and there are no store specials.

Which of the following is a control activity?

BlackTom AI · Accepted Answer

The question asks to identify a control activity among the given options, so I will evaluate each choice for its role as an actionable control.
Option A: 'Customers receive an email confirming their order when it is ready to collect.' This is an active control that provides documented evidence that the order has been processed to the point of readiness for collection. It supports proper authorization, helps ensure accuracy of the order status, and creates an auditable trail that can be used to verify that the item was prepared and the customer was informed. This aligns with control activities such as communication, documentation, and evidence collection.
Option B: 'There is no way for the customer to check the progress of their order.' This describes a lack of information flow and monitoring, which undermines controls rather than constitutes a control activity. It does not function as a mechanism to prevent, detect, or correct issues; instead, it reduces transparency and control effectiveness.
Option C: 'Customers must write down their order number.' While this is a procedural step that aids identification, it is not itself an active control operation like authorization or verification. It is more a data collection step that could be part of a process, but it does not constitute a formal control activity on its own, and it relies on customers’ compliance rather than a formal management intervention.
Option D: 'The prices on the website are centrally controlled.' Centralized pricing is a policy or governance measure that ensures consistency and authorship of pricing decisions. While important for internal control over pricing, it is more of a control environment or policy/control design issue rather than an active control procedure executed during a transaction. It supports integrity of pricing but is not an ongoing control activity like documenting, authorizing, or communicating a specific transaction.
In summary, option A describes a concrete, ongoing control activity that provides evidence, supports proper processing, and enhances the ability to monitor and verify the ordering and collection process. The other options describe either absence of control, a procedural step lacking a control trigger, or a governance policy, rather than an active control operation.

22730 Auditing and Assurance Services - Spring 2025 Module Quiz 2: In-Class Quiz

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