Which of the Following Procedures Would Best Prevent or Detect

question 54

Multiple Choice

Which of the following procedures would best prevent or detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1 to $10 and a few items selling for hundreds of dollars?

• A)Maintain a perpetual inventory of only the more valuable items with frequent periodic verification of the accuracy of the perpetual inventory record.
• B)Have an independent accounting firm prepare an internal control report on the effectiveness of the controls over inventory.
• C)Have separate warehouse space for the more valuable items with frequent periodic physical counts and comparison to perpetual inventory records.
• D)Require a manager's signature for the removal of any inventory item with a value above $50.

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Definitions:

Common Threats

General or widespread dangers that affect individuals, organizations, or communities across different contexts.

Outside-Looking-In View

A perspective where individuals analyze or assess a situation as an outsider rather than being directly involved.

Ostracism

The exclusion from a society or group, often used as a form of social punishment.

Conformity

A social influence involving a change in belief or behavior in order to fit in with a group.