An Employee in the Sales Department Completes a Purchase Requisition

question 19

Multiple Choice

An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

• A) Verify that approvals of purchasing documents comply with the authority matrix.
• B) Observe whether the purchase orders are sequentially numbered.
• C) Examine whether the sales department supervisor approves invoices for payment.
• D) Determine whether the accounts payable department reconciles all purchasing documents prior to payment.

Explain the procedure and significance of maintaining detailed and summary records in accounts payable.

Understand the organizational structure and the segmentation of companies for accounting and management purposes.

Understand the concept of database relationships, specifically one-to-many relationships.

Grasp the functionality available within the DATABASE TOOLS tab.

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Definitions:

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, often characterized by clear and rational thinking.

Evidence-Based Management

The practice of using research-based facts to make decisions.

Contingency Thinking

The approach that describes actions as dependent on the nature of the situation; one size does not fit all.

Organizational Behavior

The study of individual and group dynamics within organizational settings, aiming to understand and improve workplace performance, motivation, and culture.