An Auditor Learns That His Client Has Paid a Vendor

question 15

Multiple Choice

An auditor learns that his client has paid a vendor twice for the same shipment, once based upon the original invoice and once based upon the monthly statement. A control procedure that should have prevented this duplicate payment is:

• A) prenumbering of payment vouchers.
• B) use of a limit or reasonableness test.
• C) prenumbering of receiving reports.
• D) supporting documentation is examined before signing of cheques by an authorized person.

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Definitions:

Product Life Cycle

The progression of a product through stages of introduction, growth, maturity, and decline in the market.

Commoditization

The process by which unique products become indistinguishable from one another in the eyes of the market, often leading to competition based primarily on price.

Product Accessories

Supplementary items sold alongside the main product to enhance its functionality or appeal.