A CPA learns that his client has paid a vendor twice for the same shipment; once based upon the original invoice and once based upon the monthly statement sent from the vendor. A control procedure that should have prevented this duplicate payment is
A)prenumbering of disbursement vouchers.
B)attachment of the receiving report to the disbursement report.
C)use of a limit or reasonableness test.
D)prenumbering of receiving reports.

Question

Quizplus · Accepted Answer

Attaching the receiving report to the disbursement report allows the CPA to verify that the vendor was only paid once for the shipment, as the receiving report should only be attached to the disbursement report for the initial payment. Prenumbering of disbursement vouchers and receiving reports and using a limit or reasonableness test serve as preventive control measures, but they would not detect a duplicate payment that has already been made.

A CPA Learns That His Client Has Paid a Vendor