An auditor 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:
A) use of a limit or reasonableness test.
B) prenumbering of receiving reports.
C) prenumbering of payment vouchers.
D) examination of supporting documentation by an authorized person before the signing of cheques.

Question

Quizplus · Accepted Answer

By examining supporting documentation by an authorized person before the signing of cheques, the auditor can ensure that duplicate payments are not made. This control procedure provides an additional layer of approval before payment is made, reducing the risk of errors. The use of a limit or reasonableness test may help identify unusual payments, but it would not necessarily prevent duplicate payments. Prenumbering of receiving reports and payment vouchers can help ensure completeness of documentation, but it does not prevent duplicate payments.

An Auditor Learns That His Client Has Paid a Vendor