Which of the Following Duties Would Indicate a Weakness in Internal

question 24

Multiple Choice

Which of the following duties would indicate a weakness in internal controls?

• A)The accounting function is under the controller.
• B)The custodianship of cash is the responsibility of the treasurer's function.
• C)The internal auditor reports to the board of directors.
• D)The custodianship of buildings and equipment is the responsibility of the controller's function.

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Definitions:

Economic Order Quantity

A formula used to determine the most cost-effective quantity to order, balancing ordering costs with holding costs.

EOQ

Economic Order Quantity, a formula used in inventory management to determine the optimal order size that minimizes total costs of inventory holding and ordering.

Ordering Cost

The expenses associated with placing an order for supplies or inventory, including costs related to paperwork, communication, and logistics.

Revised EOQ

Economic Order Quantity; refers to the updated calculation of the optimal quantity of inventory to minimize total inventory costs, including holding, ordering, and shortage costs.