Question: Match the threats in the left column to appropriate control procedures

Question

Question: Match the threats in the left column to appropriate control procedures in the right column. More than one control may be applicable hreat ontrol Procedure Accept only deliveries for which an approved purchase Document all transfers of inventory Restrict physical access to inventory 1. Failing to take available purchase a. iscounts for prompt payment rder exists 2. Recording and posting errors in accounts payable 3. Paying for items not received 4. Kickbacks 5. Theft of inventory 6. Paying the same invoice twice File invoices by due date Maintain a cash budget. Conduct an automated comparison of total change in cash o total changes in accounts payable 7. Stockouts Adopt a perpetual inventory system 8. Purchasing items at inflated prices h. Require purchasing agents to disclose financial or rsonal interests in suppliers 9. Misappropriation of cash i. Require purchases to be made only from approved suppliers 10. Purchasing goods of inferior Restrict access to the supplier master data. uality

Explanation / Answer

Control Procedure Failing to take available purchase discounts for prompt payment. D,E Recording and posting errors in accounts payable. F Paying for items not received. L Kickbacks H, O Theft of inventory. B, C, G Paying the same invoice twice. L, M Stockouts B, C, G Purchasing items at inflated prices. H, I, J, O Misappropriation of cash. K, Q Purchasing goods of inferior quality. H, I, O, P Wasted time and cost of returning unordered merchandise to suppliers. A Accidental loss of purchasing data. N Disclosure of sensitive supplier information (e.g., banking data J

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