The Purchasing Manager at Folding Squid Technologies Has Responsibility for Reviewing

question 33

Multiple Choice

The purchasing manager at Folding Squid Technologies has responsibility for reviewing and authorizing purchase orders.Receiving reports are prepared by shipping and receiving based on the relevant purchase order(s) .Purchase orders,receiving reports,and vendor invoices are reconciled by accounts payable,which authorizes payment.Which of the following would correct control weaknesses,if any,related to these activities?

• A) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct.
• B) Accounts payable should authorize purchase orders.
• C) Receiving reports should be reviewed and corrected by the purchasing manager.
• D) Controls are adequate under the current system.

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Definitions:

Profit Margin

The percentage of revenue remaining after all expenses have been deducted from sales.

Return On Investment

Return on investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested, expressed as a percentage.

Investment Centre

A division or unit within a company that is responsible for its own revenues, expenses, and assets, and is evaluated based on its return on investment.

Performance Evaluation

An assessment process where an individual's or team's work outputs and efficiency are measured and reviewed against set goals or criteria.