Describe an Internal Control Procedure That Would Prevent Payment of an Invoice

question 65

Essay

Describe an internal control procedure that would prevent payment of an invoice for goods that were never delivered.

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Definitions:

Reserve Requirement Ratio

The fraction of deposits that banks must hold in reserve and not loan out, as mandated by central banking authorities.

Central Bank

An institution designed to oversee the banking system, regulate the quantity of money in the economy, and provide various financial services to the government.

Treasury Bonds

Long-term government debt securities with a fixed interest rate, considered low-risk investments.

Required Reserves

The minimum amount of deposits that a bank must hold in reserve and not lend out, as mandated by central banking regulations.