Why is a good system of internal controls necessary over inventory?
A)Inventory is an asset that a company must have available to sell.
B)Inventory is large and hard for a company to manage with proper controls.
C)Inventory is one of the main targets of fraud and theft.
D)Inventory is tied to liabilities and must be managed before too much debt is incurred.

Question

Quizplus · Accepted Answer

Inventory is often a target for fraud and theft, so having a strong system of internal controls in place can help prevent such occurrences. This can include measures such as physical security, regular inventory counts, and proper documentation and segregation of duties. Additionally, inventory is a significant asset for many companies, and effective inventory management is crucial for optimizing operations and maximizing profitability.

Why Is a Good System of Internal Controls Necessary Over