One of the most critical controls to prevent theft of inventory purchased is to:
A)Require authorization of the purchase requisition
B)Segregate inventory custody from inventory record keeping
C)Compare the purchase order, receiving report, and invoice
D)Segregate the authorization of purchases from the inventory record keeping

Question

Quizplus · Accepted Answer

Segregating inventory custody from inventory record keeping means that individuals who have access to inventory records are not the same ones who physically handle the inventory. This helps prevent theft, as two people would need to collude in order for inventory to be stolen without being detected. Requiring authorization of the purchase requisition and segregating the authorization of purchases from the inventory record keeping are also important controls, but they do not specifically address the issue of theft of inventory purchased. Comparing the purchase order, receiving report, and invoice is important for ensuring that goods are received and paid for correctly, but again, it does not specifically address the prevention of theft.

One of the Most Critical Controls to Prevent Theft of Inventory