Mitigating Risks through Automated Match Control

C.

The implementation of an automated match between purchase orders, goods receipts, and invoices is a control aimed at ensuring that all three documents match before payments are made. This control is commonly referred to as three-way matching and is a critical control in the procure-to-pay process.

Of the risks listed, the control is best designed to mitigate the risk of invalid payments being processed by the system. When invoices are processed and paid without being matched to a valid purchase order and goods receipt, there is a risk that the payment may be for goods or services not received, duplicate payments or even fictitious invoices. This risk is mitigated by the three-way matching process, where invoices are compared against both the purchase order and the goods receipt to ensure that all three documents match before payment is made.

Option A (Customer discounts not being applied) and D (Delay of purchase orders) are not directly mitigated by the three-way matching control. Customer discounts not being applied is a risk related to pricing and discount policies, and delay in purchase orders is a risk related to the timing of ordering and receiving goods.

Option B (A legitimate transaction being paid multiple times) is a risk that can also be mitigated by the three-way matching control. If invoices are matched to purchase orders and goods receipts before payment is made, there is a lower risk of duplicate payments. However, it is important to note that this risk can also be mitigated by other controls such as vendor master file maintenance and segregation of duties.

In conclusion, of the risks listed, the three-way matching control is best designed to mitigate the risk of invalid payments being processed by the system.