When in an examination of a retail firm, Lily, a recently recruited internal auditor, discovered a plan in which the warehouse manager and a buying staff moved around Php2 million worth of products to an outside warehouse, where they were sold to third parties. Because the warehouse manager changed the perpetual inventory records and subsequently transmitted receiving reports to the accounts payable department for processing, the fraud was not discovered earlier by the internal audit team. Which one of the following steps did Lily follow that resulted in the discovery of the missing materials and the fraud? Group of answer choices Random sampling of receiving reports and tracing to the recording in the perpetual inventory records. Selecting a random sample of purchase orders and trace to receiving reports and to the records in the accounts payable department. Performance of physical inventory count, then reconciliation of the amounts with the perpetual inventory records. Random
When in an examination of a retail firm, Lily, a recently recruited internal auditor, discovered a plan in which the warehouse manager and a buying staff moved around Php2 million worth of products to an outside warehouse, where they were sold to third parties. Because the warehouse manager changed the perpetual inventory records and subsequently transmitted receiving reports to the accounts payable department for processing, the fraud was not discovered earlier by the internal audit team.
Which one of the following steps did Lily follow that resulted in the discovery of the missing materials and the fraud? Group of answer choices
Random sampling of receiving reports and tracing to the recording in the perpetual inventory records.
Selecting a random sample of purchase orders and trace to receiving reports and to the records in the accounts payable department.
Performance of physical inventory count, then reconciliation of the amounts with the perpetual inventory records.
Random sampling of sales invoices and tracing to the perpetual inventory records to see if inventory was on hand.
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