Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?
A)Supplies of relatively little value are expensed when purchased.
B)The cycle basis is used for physical counts.
C)The warehouse manager is responsible for maintenance of perpetual inventory records.
D)Perpetual inventory records are maintained only for items of significant value.

Question

Quizplus · Accepted Answer

The warehouse manager being responsible for maintenance of perpetual inventory records is an internal control weakness because it violates the principle of segregation of duties. This principle requires that the responsibility for record-keeping and the physical custody of assets should be held by different individuals to reduce the risk of errors or fraud.

Which of the Following Is an Internal Control Weakness for a Company