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In a well-designed internal control structure, employees in the same department most likely would approve purchase orders, and also
A. Reconcile the open invoice file.
B. Inspect goods upon receipt.
C. Authorize requisitions of goods.
D. Negotiate terms with vendors

Hello. Can anyone help me with this question? Answer is D, and I agree. However, I don’t know why C is not correct since choice C seems to me is also an authorization function, because I feel that approving PO is the same as authorizing requisition of goods. Can anyone correct me? Thank you!

Fight!

[Missy]

Because C is also an authorization function it would give the same department too much authority. They're entirely different, actually. Approving requisitions means saying it's ok to buy a new copier. Approving the purchase order means saying it's ok to buy the already approved copier from staples.

Old timer,  A71'er since 2010.

Finance manager/HR manager

 

 

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Author]

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