Explain a typical control preventing, or detecting and correcting, duplicate payment of a vendor's invoice in...

Explain a typical control preventing, or detecting and correcting, duplicate payment of a vendor's invoice in a purchasing system.

Expert Solution

Explanation:

Control risk s those risk which arises due to non-prevention, detection & correction of risk associated with the internal control system.

Management can typically use the following for preventing or controlling and detecting of payment made to fictitious vendor:

Segregation of Duties: Management should segregate the duties of the various role such as procurement of raw material to pay for the transaction so that prevent the payment made to the fictitious vendor
Control System related to the recording of vendor details: Management should record the transaction of each vendor & create some control like duplication of invoices, contact details, mail id, etc. so that fictitious payment will be prevented, corrected or detected on early basis
Management should ensure security while hiring the employees such as their financial background etc
Management should create such an environment so that employees or others may report for any irregularities observed in their knowledge

ekkarill92 answered 2 years ago

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