Property Acquisitions That Are Misclassified as Maintenance Expense Would Most

question 31

Multiple Choice

Property acquisitions that are misclassified as maintenance expense would most likely be detected by an internal control system that provides for:

• A)Investigation of variances within a formal budgeting system.
• B)Review and approval of the monthly depreciation entry by the plant supervisor.
• C)Segregation of duties of employees in the accounts payable department.
• D)Examination by the internal auditors of vendor invoices and canceled checks for property acquisitions.

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Definitions:

Legitimate Power

Authority that is recognized and accepted, based on a person's position or role within an organizational hierarchy.

Organizational Position

A specific role or rank within an organization, typically associated with certain responsibilities and authority.

Behaviour

A range of actions and mannerisms made by individuals, organisms, systems, or artificial entities in conjunction with their environment, which includes other systems or organisms around as well as the (inanimate) physical environment.

Trust

The confidence in the reliability, truth, ability, or strength of someone or something, crucial for building healthy relationships and effective teams.