Peter Budd, the purchasing officer of Lake Hardware Wholesalers Pty Ltd (Lake), has a relative who owns a retail hardware store. Peter Budd arranged for hardware to be delivered by manufacturers to the retail store on a COD basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control for:
A) purchase requisitions.
B) cash receipts.
C) perpetual inventory records.
D) purchase orders.

Question

Quizplus · Accepted Answer

Peter Budd was able to arrange deliveries directly to his relative's store likely due to poor internal control over purchase orders, which would allow him to manipulate or create orders without proper oversight.

Peter Budd, the Purchasing Officer of Lake Hardware Wholesalers Pty