An internal control questionnaire indicates that an approved receiving report is required to accompany every check request for payment of merchandise.Which of the following procedures provides the greatest assurance that this control is operating effectively?
A)Select and examine receiving reports and ascertain that the related canceled checks are dated no earlier than the receiving reports.
B)Select and examine receiving reports and ascertain that the related canceled checks are dated no later than the receiving reports.
C)Select and examine canceled checks and ascertain that the related receiving reports are dated no earlier than the checks.
D)Select and examine canceled checks and ascertain that the related receiving reports are dated no later than the checks.

Question

Quizplus · Accepted Answer

Selecting and examining canceled checks and ascertaining that the related receiving reports are dated no later than the checks ensures that payments are made only after the receipt of goods, which aligns with the control of requiring an approved receiving report for each payment. This method verifies that the control is being followed by checking that goods were received before or on the same date the payment was made.

An Internal Control Questionnaire Indicates That an Approved Receiving Report