Grade 11 · CAPS
Grade 11 Ethics and Internal Control
Accounting practice questions and a worked example
Grade 11 Accounting questions on ethics and internal control give you a short scenario, such as cash stolen on the way to the bank, a partner dealing secretly with a supplier or a branch manager taking too much leave. You explain business ethics and whistle-blowing, identify the problem with figures, and suggest internal control measures. They come from the Eastern Cape Department of Education’s Grade 11 November papers for 2023, 2024 and 2025, each with the answer from the marking guideline.
Worked example
QUESTION 1: RECONCILIATIONS
1.1 BANK RECONCILIATION
AQUA STORES
The information relates to August 2023. The owner, Flavo, uses the official bank statement which is available on the 26th of each month, to complete the monthly bank reconciliation process.
1.1.4 Explain any TWO different internal control measures that Flavo can implement, based on a problem you identified in the information provided. List the problem identified and the possible internal control measures.
Answer
ONE problem: deposits are done late / cash is kept for long periods / money is missing / poor recording, making mistakes.
TWO internal control measures (any two):
• Division of duties / duties are shared
• Employ a security company to assist
• Bank notification (e.g. SMS)
• Authorisation / supervision
• Training of the bookkeeper
• Policy on daily depositing
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More practice questions
Explore additional Grade 11 Ethics and Internal Control questions.
- 2QUESTION 1: FIXED ASSETS AND INTERNAL CONTROLS The following information relates to Asande Traders for the year ended 29 February 2024. 1.4 The owner notices that the mileage on one of the vehicles is extremely high. He therefore concluded that the driver is misusing the vehicle. Suggest TWO internal control measures that can be implemented to safeguard the business against the misuse of vehicles.
- 3QUESTION 1: RECONCILIATONS AND INTERNAL CONTROL 1.1 CREDITORS RECONCILIATION Muller Stores has received a statement from a creditor, Kouga Traders at the end of October 2024. The balance on the statement does not correspond with the balance in the Creditors’ Ledger of Muller Stores. 1.1.2 Name TWO tasks of the creditors’ clerk to maintain or improve the internal control of creditors.
- 4QUESTION 1: RECONCILIATONS AND INTERNAL CONTROL 1.1 CREDITORS RECONCILIATION Muller Stores has received a statement from a creditor, Kouga Traders at the end of October 2024. The balance on the statement does not correspond with the balance in the Creditors’ Ledger of Muller Stores. 1.1.3 Before granting credit to new debtors, it is important for Kouga Traders to establish effective control measures. Prior to granting credit, documentation such as identification and proof of address is mandatory. Identify a specific document that Kouga Traders may accept from new debtors as valid proof of residency.
- 5QUESTION 1: RECONCILIATONS AND INTERNAL CONTROL 1.2 BANK RECONCILIATION Time Tech Traders buys and sells smart watches. The business is owned by Elgin Timekeeper. Time Tech Traders buys and sells stock on credit and for cash. The official bank statement for September 2024 was received on 25 September 2024. All cash transactions are controlled by Carro Johnson. 1.2.2 As the internal auditor, you are not happy with the control of cash in the business. • Explain TWO problems you have identified from the transactions, which show a lack of control of cash. Quote figures. • Give advice on how EACH problem can be avoided in future.
Common mistakes
- Naming a problem without figures. The marking guideline wants the amount with the problem, such as R15 000 stolen on the way to the bank or a deposit of R52 000 not yet on the bank statement.
- Giving one piece of advice for every problem. Each problem gets its own advice: sending at least two people to the bank answers the theft, and regular deposits answer the outstanding deposit.
- Describing a whistle-blower as a troublemaker. A whistle-blower reports workplace conduct that he or she believes to be illegal or unsafe.
More Grade 11 Accounting topics
Aligned to CAPS Grade 11 Accounting — Ethics and Internal Control. Curriculum source: CAPS for the FET Phase, Department of Basic Education.
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