ACCA Audit and Assurance (F8) Practice Exam

What is a specific control related to handling invoices in purchases?

1. Invoices should be delivered personally

2. Invoices should have genuine, authorized Purchase Orders

3. Invoices should be filed away immediately

4. Invoices should be processed on a weekly basis

The correct answer is: Invoices should have genuine, authorized Purchase Orders

Invoices having genuine, authorized Purchase Orders is a critical control in the handling of invoices during the purchasing process. This control helps ensure that all invoices received are legitimate and correspond to actual purchases made by the organization. By requiring that each invoice be supported by an approved Purchase Order, the organization can verify that goods or services invoiced were indeed requested and received. This not only helps prevent fraud and errors, but also enhances the integrity and accuracy of financial reporting. Furthermore, this control allows for better tracking of expenditures and serves as a reference for future audits and reviews. It provides assurance that the purchasing process is aligned with the organization's policies and that spending is conducted in a controlled manner. Therefore, having genuine, authorized Purchase Orders linked to each invoice significantly strengthens the invoice processing and payment system within the organization.