Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?
A)Purchase orders are not prepared for services acquired directly under authorization of department heads.
B)The same person authorizes voucher packages and signs checks.
C)Unacceptable goods are not scheduled on receiving reports.
D)The same person signs checks and stamps vouchers PAID.

Question

Quizplus · Accepted Answer

When the same person authorizes voucher packages and signs checks, it indicates a lack of segregation of duties, which is a potential material weakness in internal control. This situation increases the risk of fraud or error because one individual has control over both the approval and disbursement of funds.

Which of the Following Situations Indicates a Potential Material Weakness