Production Managers for a Manufacturing Company Are Authorized to Prepare

Multiple Choice

Production managers for a manufacturing company are authorized to prepare emergency purchase orders for raw materials. These manually prepared orders do not go through the purchasing department and do not require a receiving report. The managers forward the invoice and purchase order to the accounting department for payment. Which of the following internal controls would efficiently prevent abuse of this system?

A) Institute a company policy requiring rotation of orders among several suppliers.
B) Require a manual receiving report from the warehouse prior to payment.
C) Forbid the use of emergency purchase orders.
D) Review the level of safety stock.