Question

Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?

A) Lack of periodic inventory checks
B) Frequent inventory reconciliation
C) Automated inventory tracking
D) Detailed inventory categorization

Answer 1

The internal control weakness is a lack of periodic inventory checks, which increases risk of unnoticed inventory issues. The other options represent good practices that strengthen control systems.

Step-by-step explanation:

The internal control weakness for a company whose inventory consists of a large number of individual items is A) Lack of periodic inventory checks. Without periodic inventory checks, there is a greater risk of theft, loss, or misplacement of inventory going unnoticed. Effective internal control systems involve regular inventory counts to verify records and deter misappropriation of assets. On the contrary, Frequent inventory reconciliation, Automated inventory tracking, and Detailed inventory categorization are examples of good internal control practices that help maintain the accuracy of inventory records and reduce the likelihood of errors or fraud.