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 sent from the vendor.A control procedure that should have prevented this duplicate payment is
A)Prenumbering of disbursement vouchers.
B)Attachment of the receiving report to the disbursement report.
C)Use of a limit or reasonableness test.
D)Prenumbering of receiving reports.

Question

Quizplus · Accepted Answer

The attachment of the receiving report to the disbursement report would have allowed the CPA to verify that the shipment was indeed received before the payment was made, and thus prevented the duplicate payment. Prenumbering of disbursement vouchers would not have prevented the duplicate payment in this situation, as the payment was made based on the vendor's statement rather than the voucher number. The use of a limit or reasonableness test would not have been effective in preventing this duplicate payment. Prenumbering of receiving reports would not have prevented the duplicate payment, as the duplicate payment was made based on the vendor's statement rather than the receiving report number.

A CPA Learns That His Client Has Paid a Vendor