Exam CISA topic 1 question 1159 discussion

The best risk mitigated by implementing an automated three-way match is invalid payment processing. A three-way match involves comparing three key documents in the procurement and payment process: the purchase order, the receiving report, and the vendor invoice. Automating this matching process helps ensure that the quantities and prices on the invoice match the quantities received and the agreed-upon prices in the purchase order. It helps prevent invalid payments by detecting discrepancies or errors in the documentation before payment is processed.

B. Invalid payment processing. The three-way match is a common control mechanism in the procurement and accounts payable processes, especially in the context of managing supplier invoices and payments. It involves matching three key documents: Purchase Order (PO): This document outlines what was ordered, including quantity and price. Receipt of Goods/Services: This document confirms that the goods or services have been received as per the PO. Supplier Invoice: This document contains the supplier's request for payment. The purpose of the three-way match is to ensure that the invoice matches both the purchase order and the receipt of goods/services.