Final answer:
Independent verification is applied to the conversion cycle by using an independent party to verify the accuracy and reliability of the conversion process. This can be done through external audits or third-party verification, which helps increase reliability and reduce the risk of errors or fraudulent activities.
Step-by-step explanation:
Independent verification is an important concept in the conversion cycle of a business. It refers to the process of verifying the accuracy and reliability of the conversion process by using an independent party. This can be done through external audits or third-party verification.
For example, in the conversion of raw materials into finished goods, independent verification can be applied by having an external auditor review the conversion process to ensure that the quantities and costs of materials used are accurately recorded and that the conversion is done according to established standards. The auditor can also verify the accuracy of the final product inventory and its valuation.
By implementing independent verification, businesses can increase the reliability of their conversion cycle and reduce the risk of errors or fraudulent activities.