Which of the following is most likely to be considered a control weakness?

Which of the following is most likely to be considered a control weakness?
A . Vendor invoice payment requests are accompanied by a purchase order and receiving report.
B . Purchase orders are typed by the purchasing department using prenumbered forms.
C . Buyers promptly update the official vendor listing as new supplier sources become known.
D . Department managers initiate purchase requests that must be approved by the plant superintendent.

View Answer

Answer: D

Explanation:

A control weakness in the context of internal control over purchasing might be seen in the process where department managers initiate purchase requests that must be approved by the plant superintendent. If the approval process is not robust, this could lead to conflicts of interest or lack of independent review, especially if the superintendent has significant influence or control, and there are no further checks or balances. This situation could potentially allow for inappropriate approvals without sufficient oversight, representing a control weakness.

Reference: Internal control frameworks, such as COSO (Committee of Sponsoring Organizations of the Treadway Commission).