During an Engagement the Internal Auditors Reported That the Organization

question 186

Multiple Choice

During an engagement the internal auditors reported that the organization was paying suppliers without receiving the merchandise. Management responded that it would immediately establish the use of receiving reports. As part of the follow-up activity, which of the following procedures would be the most appropriate in determining that management action was implemented?

• A) Ask management if the new policy related to the receiving reports is in place.
• B) Select a sample of receiving reports and determine if payments were made.
• C) Interview warehouse employees to ascertain adherence to new policy.
• D) Select a sample of payments and determine if a receiving report exists.

---

Definitions:

Price Consideration

The process of determining the price at which a product or service will be offered to the market, taking into account factors like cost, competition, and demand.

Internal Marketing

The promotion of a company's objectives, products, and services to its own employees, with the aim of increasing job satisfaction and maintaining high morale.

Increased Efforts

Enhanced or more vigorous attempts to accomplish a task or reach a goal, often requiring additional resources or energy.

Centralized Marketing Structures

Organizational layouts where decision-making and marketing activities are concentrated in a single or few locations, often at the headquarters.