Which of the following statements describes a control weakness?
A.
Purchasing procedures are well designed and are followed even when the purchasing supervisor wishes to direct otherwise.
B.
Pre-numbered blank purchase orders are secured within the purchasing department.
C.
Normal operational purchases fall in the range from $500 to $1, 000, with a single signature required for purchases over $1, 000.
D.
The purchasing agent in a personal capacity invests in a publicly-traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.
D. The purchasing agent in a personal capacity invests in a publicly-traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.
The statement that describes a control weakness is option D. This is because the purchasing agent's personal investment in a mutual fund that includes stock from one of the company's suppliers creates a potential conflict of interest. It introduces the risk that the purchasing agent may not act in the best interest of the company when making purchasing decisions, as their personal financial interests may be influenced by the supplier's performance.
D. The purchasing agent in a personal capacity invests in a publicly-traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.
The statement that describes a control weakness is option D. This is because the purchasing agent's personal investment in a mutual fund that includes stock from one of the company's suppliers creates a potential conflict of interest. It introduces the risk that the purchasing agent may not act in the best interest of the company when making purchasing decisions, as their personal financial interests may be influenced by the supplier's performance.
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