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. A control procedure that should have prevented this duplicate payment is the
A) attachment of the receiving report to the disbursement report.
B) prenumbering of disbursement vouchers.
C) use of a limit or reasonableness test.
D) prenumbering of receiving reports.

Question

Quizplus · Accepted Answer

By attaching the receiving report to the disbursement report, the CPA would have been able to confirm whether the payment had already been made or not, thus preventing duplicate payment. Prenumbering of disbursement vouchers and receiving reports would help in tracking the documents, but it would not have explicitly prevented duplicate payment. The use of a limit or reasonableness test would not be relevant in this scenario.

A CPA Learns That His Client Has Paid a Vendor