ACCA Audit and Assurance (F8) Practice Exam

What should be ensured during the receipt of goods in relation to authorized purchases?

1. Invoices should not exceed order amounts

2. Goods should match purchase orders

3. Goods must be returned if unwanted

4. Payment terms should be reviewed

The correct answer is: Goods should match purchase orders

It is essential that during the receipt of goods, the goods must align with the purchase orders. This practice ensures that the organization receives what it has specifically ordered in terms of quantity, quality, and specifications. Matching goods to purchase orders is a critical control mechanism in the procurement process, as it helps prevent discrepancies that could arise from errors in ordering or delivering. When goods match the purchase orders, it confirms that the purchasing process was properly followed, and it provides a basis for verifying that the order was fulfilled correctly. This alignment assists in minimizing the risk of fraud and enhances inventory management by ensuring that the organization only pays for the items that were authorized and that meet the specified requirements. In contrast, while invoices not exceeding order amounts can be important for budget control, they do not directly verify the actual receipt of the correct goods. The return of unwanted goods pertains to inventory management but does not address the initial receipt effectiveness. Reviewing payment terms is related to financial management but does not impact the validation of goods received. Thus, aligning received goods with purchase orders is the most critical aspect of ensuring proper controls during the receipt of goods.