Maximum benefit from independent internal verification is obtained when
A) it is made on a pre-announced basis.
B) it is done by the employee possessing custody of the asset.
C) discrepancies are reported to management.
D) it is done at the time of the audit.

Question

Quizplus · Accepted Answer

The maximum benefit from independent internal verification is obtained when discrepancies are reported to management. This allows for prompt action to be taken to correct errors and prevent future discrepancies. Pre-announcing the verification could lead to attempts to cover up errors, and having the employee with custody of the asset perform the verification may not be independent enough. Waiting until the time of the audit may be too late to prevent significant errors or fraud.

Maximum Benefit from Independent Internal Verification Is Obtained When