At the West Texas Clothing Store, the same employee that sold merchandise rings up returned merchandise and refunds the cash. Which internal control procedure is being violated by West Texas Clothing Store?
A) The "tone at the top" requires that the owner and managers set a good example.
B) A company must identify its risks.
C) External auditors will monitor internal controls.
D) All transactions must be properly authorized.

Question

Quizplus · Accepted Answer

The internal control procedure being violated is that all transactions must be properly authorized. By allowing the same employee to handle both sales and returns, there's a lack of segregation of duties, which can lead to unauthorized transactions or potential fraud. Proper internal controls would require different individuals to handle these tasks to ensure checks and balances.

At the West Texas Clothing Store, the Same Employee That