Production managers for a manufacturing company are authorized to prepare emergency purchase orders for raw materials. These manually prepared orders do not go through the purchasing department and do not require a receiving report. The managers forward the invoice and purchase order to the accounting department for payment. Which of the following internal controls would efficiently prevent abuse of this system?
- Institute a company policy requiring rotation of orders among several suppliers.
- Require a manual receiving report from the warehouse prior to payment.
- Forbid the use of emergency purchase orders.
- Review the level of safety stock.
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