Exam AUD topic 1 question 831 discussion

Actual exam question from AICPA's AUD

Question #: 831
Topic #: 1

Which of the following controls would be most effective in assuring that recorded purchases are free of material errors?

A. The receiving department compares the quantity ordered on purchase orders with the quantity received on receiving reports.
B. Vendor's invoices are compared with purchase orders by an employee who is independent of the receiving department.
C. Receiving reports require the signature of the individual who authorized the purchase.
D. Purchase orders, receiving reports, and vendor's invoices are independently matched in preparing vouchers.

Show Suggested Answer

Suggested Answer: D 🗳️
Choice "D" is correct. The most effective control in assuring that recorded purchases are free of material errors is the independent matching of the purchase order, receiving report, and vendor's invoices in preparing the vouchers on which the disbursement check is based.
Choice "A" is incorrect. The receiving department should not have access to the quantity ordered on the purchase order. This forces receiving department employees to actually perform an independent count.
Choice "B" is incorrect. It is not enough to compare only vendor invoices and purchase orders, as this will still allow payment for goods that were not received.
Choice "C" is incorrect. Requiring that receiving reports be authorized by the individual who authorized the purchase does not ensure that the invoice and the related payment will be properly recorded.

by gemazyni at April 5, 2025, 5:11 p.m.

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