Question

The chief audit executive was reviewing recent reports that had recommended additional engagements because of risk exposures to the organization. Which of the following represents the greatest risk and should be the next assignment?

1) Three prenumbered receiving reports were missing.
2) There were several purchase orders issued without purchase requisitions.
3) Payment had been made for routine inventory items without a purchase order or receiving report.
4) Several times cash receipts had been held over an extra day before depositing.

Answer 1

The greatest risk and the next assignment should be to address the payment made for routine inventory items without a purchase order or receiving report.

Step-by-step explanation:

Based on the given information, the greatest risk and the next assignment should be to address the payment made for routine inventory items without a purchase order or receiving report. This presents a significant risk as it suggests that the organization is making payments without proper documentation, which could lead to potential fraud or financial loss.