Which element of internal control would be best to address the following risk?

The purchasing officer orders and approves all purchases, receives the deliveries and authorises the payment in the accounting system.

Question

Which element of internal control would be best to address the following risk?

The purchasing officer orders and approves all purchases, receives the deliveries and authorises the payment in the accounting system.

BlackTom AI · Accepted Answer

The question asks which element of internal control would best address the risk described: a purchasing officer who orders, approves, receives deliveries, and authorizes payments within the accounting system.

First, notice that the description highlights a single individual performing multiple steps in the purchasing process, from initiation to payment. This concentration of duties creates opportunities for errors or fraud, since one person controls both the execution and the approval of transactions.

In typical internal control frameworks, a key mitigating control for this risk is separation of duties. By dividing responsibilities among multiple individuals—for example, one person handles ordering, another independently approves purchases, a third receives goods, and a fourth approves payments—the organization reduces the risk that one person could both commit and conceal irregularities or unauthorized activity.

Now, considering the provided options: the data shows only one listed answer, 'Separation of duties.' without additional alternatives. If we evaluate this option in isolation, it directly targets the core risk: the lack of independent checks and balances across the purchasing cycle. Implementing separation of duties would force verification at multiple points, such as separation between requisitioning, approval, receipt, and disbursement, which constrains opportunities for misappropriation and ensures appropriate review.

However, since no other options are presented to compare, we cannot contrast separation of duties with alternatives like management authorization controls, audit trails, or reconciliations within this question as given. In a broader context, other relevant controls that typically complement separation of duties include independent authorization, goods receipt verification, frequent reconciliations between purchases and payments, and supervision.

In summary, the rationale for selecting separation of duties rests on the fundamental principle that dividing duties across individuals creates multiple checkpoints, thereby reducing the chance that one person can both execute and conceal improper transactions. The lack of other options prevents a comparative evaluation here, but separation of duties directly addresses the described risk by introducing independent processing and oversight steps.

Which element of internal control would be best to address the following risk? The purchasing officer orders and approves all purchases, receives the deliveries and authorises the payment in the accounting system. 单项选择题

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