Good internal controls over the write-off of uncollectible accounts ________.
A)are optional if the company is smaller in size
B)are typically expensive and cumbersome to implement
C)are important to prevent write-offs from being used to conceal fraud in processing cash receipts
D)are less important if accounts receivable are outsourced

Question

Quizplus · Accepted Answer

Good internal controls over the write-off of uncollectible accounts are important to prevent write-offs from being used to conceal fraud in processing cash receipts. It is crucial to have tight controls in place to ensure that write-offs are properly authorized and documented to prevent misuse of funds. Good internal controls can also help to identify trends in uncollectible accounts and improve overall credit and collection procedures. While smaller companies may have less complex internal control systems, they should still have appropriate controls in place to manage their cash receipts and prevent fraud. Similarly, outsourcing accounts receivable does not relieve a company of its responsibility to maintain appropriate internal controls over its financial processes.

Good Internal Controls Over the Write-Off of Uncollectible Accounts ________