An organization allows the same individuals to physical access inventory and purchase new assets when supplies are depleted. Which of the following would best help the organization manage the risk of fraud?
A.
Accounting personnel should regularly perform reconciliation between invoices and purchase orders
B.
Accounting personnel should conduct a periodic inventory count and reconcile inventory movements
C.
internal auditors should review Vie frequency and volume of purchased assets to detect trends in the inventory levels
D.
Management should established a policy requiring new inventory asset purchases to be made on serialized order forms with copies retained
For an organization that allows the same individuals to access physical inventory and purchase new assets, conducting a periodic inventory count and reconciling inventory movements is the best way to manage the risk of fraud. This approach ensures that inventory records are accurate and allows discrepancies to be identified and investigated promptly, thereby providing a check against fraudulent activities or errors. References: Best practices in internal control procedures for inventory management, as recommended by the Institute of Internal Auditors (IIA).
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit