Which of the following control activities are useful in reducing the risk of fraud?
A)All sales returns should be authorized by sales management
B)Goods should be received only with a proper sales return authorization
C)An independent count of goods returned should be recorded on a receiving report
D)The duties of authorizing sales returns and receiving goods should be combined

Question

Quizplus · Accepted Answer

All three control activities listed help reduce the risk of fraudulent sales returns. Authorizing returns ensures they are legitimate, requiring proper authorization for receiving goods ensures that returns are handled in a controlled manner, and an independent count of goods returned helps prevent fraudulent claims. Combining the duties of authorizing sales returns and receiving goods would be a segregation of duties issue and increase the risk of fraud, so D is not a useful control activity for reducing the risk of fraud.

Which of the Following Control Activities Are Useful in Reducing