Which of the Following Is a Preventive Control for Fraud

question 349

Multiple Choice

Which of the following is a preventive control for fraud?

• A) Determining if the number of manually prepared disbursement checks is high.
• B) Reconciling the purchase orders with the requisitions.
• C) Verifying that new vendors appear on the vendor pre-approved list.
• D) Conducting an inventory count of the warehouse.

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Definitions:

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Weighted Average Cost

A method of calculating the total cost of goods available for sale, considering the weighted average of all goods.

Payback Period

The amount of time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Disposal Value

The estimated monetary value of an asset at the end of its useful life.