An organization has a policy requiring two signatures on all checks written for amounts in excess of $10, 000. When evaluating controls over disbursements, an auditor would conclude that a greater risk exists if.
An organization has a policy requiring two signatures on all checks written for amounts in excess of $10, 000. When evaluating controls over disbursements, an auditor would conclude that a greater risk exists if.
The most important concern here is the possibility of control circumvention by deliberately splitting transactions into amounts below the $10,000 threshold. If there are several instances of successively numbered checks for amounts between $5,000 and $10,000 made payable to the same vendor, it indicates a potential risk of fraud or unauthorized disbursements. This practice could be used to bypass the requirement of having two signatures for amounts in excess of $10,000, thereby compromising the integrity of the organization's controls over disbursements.
One of the items being asked during the walkthrough is whether there is a review of transactions from same vendor in the same period lower than the threshold. So d is correct
The problem here is the splitting of funds that can help to bypass the threshold that triggers controls.