An Employee in the Sales Department Completes a Purchase Requisition

Multiple Choice

An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

A) Verify that approvals of purchasing documents comply with the authority matrix.
B) Observe whether the purchase orders are sequentially numbered.
C) Examine whether the sales department supervisor approves invoices for payment.
D) Determine whether the accounts payable department reconciles all purchasing documents prior to payment.