Internal controls Several risks associated with the acquisition/payment process

Question

Internal controls
Several risks associated with the acquisition/payment process are listed below on the left; potential internal controls are listed on the right. Match each risk with the control that would best address it; do not use the same control more than once.



A cash payments clerk pays the same invoice twice.

A cash payments clerk writes a check to a fictitious vendor.

A company fails to take advantage of available cash discounts when paying vendors.

Document matching a non-employee steal user names and passwords for electronic payment transactions.

A purchasing agent steals blank purchase orders.

A receiving clerk steals inventory when it arrives.

A warehouse manager orders unneeded inventory.

An accounting clerk pays an invoice before merchandise is received.

Inventory is destroyed by a fire.

Warehouse clerks make errors in counting inventory.

A. Video surveillance equipment
B. RFID tags
C. Bank reconciliation
D. Require document matching
E. Well-designed relational database
F. Sequentially numbered documents
G. Data encryption
H. Proper transaction authorization
I. Insurance
J. Stamp "completed" on appropriate documents

Explanation / Answer

Answers: J. Cash payments clerk pays the same invoice twice.
B. Cash payments clerk writes a check to a fictitious vendor.
H. Company fails to take advantage of available cash discounts when paying vendors.
G. Document matching a non-employee steal user names and passwords for electronic payment transactions. C. A purchasing agent steals blank purchase orders. A. A receiving clerk steals inventory when it arrives. F. An accounting clerk pays an invoice before merchandise is received. I. Inventory is destroyed by a fire. D.Warehouse clerks make errors in counting inventory.
E. A warehouse manager orders unneeded inventory.
J. Cash payments clerk pays the same invoice twice.
B. Cash payments clerk writes a check to a fictitious vendor.
H. Company fails to take advantage of available cash discounts when paying vendors.
G. Document matching a non-employee steal user names and passwords for electronic payment transactions. C. A purchasing agent steals blank purchase orders. A. A receiving clerk steals inventory when it arrives. F. An accounting clerk pays an invoice before merchandise is received. I. Inventory is destroyed by a fire. D.Warehouse clerks make errors in counting inventory.
E. A warehouse manager orders unneeded inventory.

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