An Internal Auditor Noticed That Employees with Responsibilities for Cash

question 304

Multiple Choice

An internal auditor noticed that employees with responsibilities for cash collection had recently issued an unusually large number of credit memos, indicating that the original charges had been made to the wrong customer accounts. From a control standpoint, the auditor would be concerned with the possibility that:

• A) The organization is selling a large number of defective items.
• B) Employees in this function are concealing a theft of cash collected from customers.
• C) Credit memos are not being submitted on a timely basis.
• D) The credit department has not been properly screening customers and, as a result, a large portion of the accounts receivable may not be collectible.

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Definitions:

Female

Female is a term used to describe the sex of an individual that typically possesses two X chromosomes and is capable of bearing offspring or producing eggs.

Low-Income Individuals

People who earn significantly less than the average income for their community or country, often resulting in financial hardship.

Male

Referring to the sex that is typically associated with the production of small gametes for reproduction, often associated with specific physiological and genetic features.

Flashbacks

Intense, vivid memories that feel as though a person is reliving a traumatic event from the past.