Which of the Following Internal Control Weaknesses Would an Internal

question 364

Multiple Choice

Which of the following internal control weaknesses would an internal auditor most likely detect while reviewing a flowchart that depicts the purchasing function of an organization?

• A) Purchasing policies have not been updated.
• B) The organization is not taking advantage of quantity discounts available from its suppliers.
• C) Payments for goods received have not been authorized at the appropriate level.
• D) Payments to suppliers are made before goods are received.

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Definitions:

Primary Market Transaction

Deals with the issuance of new securities directly from the issuer to investors.

Secondary Market Transaction

The buying and selling of previously issued securities, such as stocks and bonds, between investors, rather than directly from issuing companies.

Bond Issue

The process of issuing new bonds by a corporation or government to raise capital, involving the creation of new debt securities to be sold to investors.

Subordinated Debt

A type of borrowing that is ranked below other debts in terms of claims on assets or earnings.