A Client's Procurement System Ends with the Assumption of a Liability

question 72

Multiple Choice

A client's procurement system ends with the assumption of a liability and the eventual payment of the liability.Which of the following best describes the auditor's primary concern with respect to liabilities resulting from the procurement system?

• A) Accounts payable are not materially understated.
• B) Authority to incur liabilities is restricted to one designated person.
• C) Acquisition of materials is not made from one vendor or one group of vendors.
• D) Commitments for all purchases are made only after established competitive bidding procedures are followed.