Controls useful in reducing the risk of fraud associated with sales adjustment transactions include
A) proper authorization of all sales adjustment transactions.
B) proper authorization of credit for returned or damaged goods.
C) proper authorization for the writing off of bad debts.
D) all of the above

Question

Quizplus · Accepted Answer

All three options are important controls in reducing the risk of fraud associated with sales adjustment transactions. Proper authorization ensures that these transactions are legitimate and can be traced back to an authorized source, preventing unauthorized transactions and reducing the risk of fraud. Without proper authorization, sales adjustments could be made for fictitious returns or damages, or bad debts could be written off without proper consideration, increasing the risk of fraud. Therefore, all three controls are necessary to reduce the risk of fraud in sales adjustment transactions.

Controls Useful in Reducing the Risk of Fraud Associated with Sales