An internal control benefit of centralized purchasing in an organization includes which of the following?
A)Separation of authorization from the custody and recording function.
B)Favorite vendors used multiple times.
C)Increased compensation of agents through side agreements.
D)Mathematically accurate vendor invoices.

Question

Quizplus · Accepted Answer

Centralized purchasing allows for the separation of authorization from the custody and recording function, which is an important internal control measure to prevent fraud and errors. Choosing favorite vendors multiple times or increasing compensation through side agreements are both potential fraud risks, and mathematically accurate vendor invoices can be achieved with or without centralized purchasing.

An Internal Control Benefit of Centralized Purchasing in an Organization