ICAEW ARF · Chapter 5 · Question 5 of 11
At a client, the sales clerk who raises sales invoices can also change the prices held in the system's standing data. What is the main risk arising?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Invoices may be raised at unauthorised prices, causing misstated revenue or enabling fraud
Explanation
Changes to standing data such as price lists affect every subsequent transaction, so they should be authorised by a senior person independent of invoicing. A clerk who can change prices and raise invoices could undercharge favoured customers or make errors that go unnoticed. The other risks relate to despatch, credit and cash allocation controls.
More Controls over revenue and purchases MCQs
- Q7Which control best ensures that the company records liabilities only for goods it has actually received?
- Q8Which control best reduces the risk of payments being diverted by changing a supplier's bank details?
- Q9At the year end, a company reviews all goods received notes that have not yet been matched to supplier invoices and accrues for them…
- Q10Which of the following controls does NOT help to ensure the completeness of trade payables?
- Q11Which control best reduces the risk of a supplier invoice being paid twice?