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You are the assurance services manager to Colourful Ltd, which manufactures and distributes commercial paint...

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Accounting

You are the assurance services manager to Colourful Ltd, which manufactures and distributes commercial paint and accessories. You are currently in the planning phase of the audit for the year ended 30 June 2018. Since your last audit, Colourful has introduced a website that allows its customers to view information of its product lines and place their purchase orders online. The website also provides customers with enquiry access to Colourful's inventory database, so that they can assess the availability of stock prior to ordering. You have held a planning meeting with the audit team and explained that your risk assessment procedures this year will vary from those performed in the past because of the introduction of Colourful's internet-based e-commerce operations since the last audit

REQUIRED

(a) Discuss how a lack of internal controls regarding Colourful 's e-commerce operations may affect the financial information.

Provide examples relating to the business-to-consumer (B2C) e- commerce services that support your argument. (b) Determine how the risks you identified in (a) will affect this year's audit approach.

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