Which of the Following Situations Is Not the Result of a Weakness

question 2

Short Answer

Which of the following situations is not the result of a weakness in or lack of internal controls?
A. Financial statements are misstated because individuals were able to update financial information beyond that needed to perform their job functions.
B. A sales order is placed on back-order, but is never filled or canceled.
C. Earnings per share are misstated due to a spreadsheet error.
D. The vendor bills an amount different than the amount entered on the purchase order.

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Definitions:

Average Inventory

The mean value of inventory over a certain period, calculated to help businesses understand inventory levels and cost of goods sold.

Order Cost

The total expenses incurred in placing and receiving an order, including production, shipping, and handling fees.

Variable Cost Per Unit

The cost that varies with each unit of production or service provided.

Net 30 Credit Policy

A payment term indicating that the payment for goods or services is due 30 days after the invoice date, often used in business-to-business transactions.