What is the BEST way to control updates to the vendor master file in an accounts payable system?
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A. B. C. D.A.
The vendor master file contains important information about the vendors with whom an organization conducts business, such as contact information, payment terms, and banking details. This file is essential for managing accounts payable, but it also represents a potential vulnerability. Unauthorized changes to the vendor master file could result in fraudulent transactions or errors in payment processing. Therefore, controlling updates to the vendor master file is critical for maintaining the integrity and security of the organization's financial data.
Out of the four options provided, the best way to control updates to the vendor master file in an accounts payable system is D) Comparing updates against authorization.
Explanation: Option A, Using prenumbered and authorized request forms, can help ensure that requests to update the vendor master file are legitimate, but it does not provide a way to verify that the requested changes are authorized. A fraudulent request could still be submitted using a prenumbered and authorized request form.
Option B, Having only one person updating the master file, may limit the number of individuals who can make unauthorized changes, but it also creates a single point of failure. If the person responsible for updating the vendor master file is absent, the updates may not be processed in a timely manner, potentially causing delays or errors in payment processing.
Option C, Periodically reviewing the entire vendor master file, is a good practice, but it does not prevent unauthorized changes from being made. By the time a review is conducted, unauthorized changes may have already been processed.
Option D, Comparing updates against authorization, involves verifying that any changes made to the vendor master file are authorized by an appropriate individual or department. This may involve implementing a workflow process for requesting and approving updates, as well as comparing any changes made to the file against a list of authorized changes. By using this approach, any unauthorized changes can be quickly identified and investigated, reducing the risk of fraud or errors in payment processing.
In conclusion, the best way to control updates to the vendor master file is to compare updates against authorization. This approach helps to ensure that any changes made to the file are legitimate and authorized, while also providing a way to quickly identify and investigate any unauthorized changes that may occur.