An IS auditor is planning an audit of an organization's accounts payable processes.
Which of the following controls is MOST important to assess in the audit?
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A. B. C. D.C.
When planning an audit of an organization's accounts payable processes, an IS auditor must assess the effectiveness of the controls in place to ensure the accuracy, completeness, and validity of financial transactions. There are several controls that an auditor can assess, but one of them is most important.
A. Management review and approval of purchase orders: This control is essential in ensuring that all purchase orders are valid and authorized by management. However, it does not ensure that the payment is made to the correct vendor or for the correct amount.
B. Management review and approval of authorization tiers: This control ensures that all authorization levels are properly defined and that there is an appropriate separation of duties. However, it does not ensure that payments are made for the correct amount or to the correct vendor.
C. Segregation of duties between issuing purchase orders and making payments: This control is important in preventing fraud and errors, as it ensures that the person who issues a purchase order is not the same person who makes the payment. This control is critical to prevent any fraudulent activities, but it still does not ensure that payments are made for the correct amount or to the correct vendor.
D. Segregation of duties between receiving invoices and setting authorization limits: This control ensures that the person who receives invoices is not the same person who sets the authorization limits. This control can prevent fraud and errors, but it still does not ensure that payments are made for the correct amount or to the correct vendor.
Therefore, the most important control to assess in the audit of an organization's accounts payable processes is C. Segregation of duties between issuing purchase orders and making payments. This control is critical in preventing fraudulent activities, as it ensures that the person who issues a purchase order is not the same person who makes the payment. By separating these duties, the likelihood of errors and fraud is significantly reduced, and the financial statements are more accurate and reliable.