An Auditor for a Large Wholesaler Is Evaluating the Controls

question 371

Multiple Choice

An auditor for a large wholesaler is evaluating the controls over the approval and oversight of credit sales. Which of the following procedures would be a control weakness?

• A) The credit department is responsible for approving shipments to all customers.
• B) The finance committee of the board of directors periodically reviews credit standards.
• C) Customers who fail to meet credit requirements must pay cash for shipments upon delivery.
• D) The sales department is responsible for determining the credit ratings of customers.

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