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Exam AUD topic 1 question 836 discussion

Actual exam question from AICPA's AUD
Question #: 836
Topic #: 1
[All AUD Questions]

In a well designed internal control, employees in the same department most likely would approve purchase orders, and also:

  • A. Reconcile the open invoice file.
  • B. Inspect goods upon receipt.
  • C. Authorize requisitions of goods.
  • D. Negotiate terms with vendors.
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Suggested Answer: D 🗳️
Choice "D" is correct. In a well-designed internal control, employees in the purchasing department most likely would approve purchase orders and also negotiate terms with vendors.
Choice "A" is incorrect. Personnel in the accounts payable department reconcile the open invoice file while the purchasing agent approves purchase orders.
Choice "B" is incorrect. Employees in the receiving department inspect goods upon receipt while the purchasing agent approves purchase orders.
Choice "C" is incorrect. The stores department (personnel in the raw materials inventory area) authorize requisition of goods while the purchasing agent approves purchase orders.
by gemazyni at April 5, 2025, 5:11 p.m.

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