Question

A medium-sized regional firm distributes packaged snack foods to convenience stores. A routine inventory has revealed significant amounts of inventory missing from the delivery trucks. Which of the following suggest a control weakness that may provide on opportunity for fraud?

a. Access to the warehouse is restricted to a few trusted employees.
b. Truck drivers are allowed to use the trucks for personal reason, including taking them home at night, as a benefit of employment.
c. The policy and procedure manual clearly defines allowed and prohibited actions.
d. Careful counts are made as inventory is loaded on the trucks.

Answer 1

Option b, which indicates that truck drivers are allowed to use the trucks for personal reasons, is the control weakness that may offer an opportunity for fraud, as it could lead to unauthorized access to the inventory.

Step-by-step explanation:

The control weakness that may provide an opportunity for fraud in the scenario where significant amounts of inventory are missing from the delivery trucks of a regional firm distributing snack foods is option b. Truck drivers are allowed to use the trucks for personal reasons, including taking them home at night, as a benefit of employment. This presents a risk because allowing personal use of company trucks without proper monitoring can lead to unauthorized access to inventory and potentially unauthorized sales or use of the company's goods.


Options a, c, and d are generally considered good control practices because they restrict access, provide clear guidelines, and ensure accurate inventory counts.