Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 193

Which of the following describes a control weakness?

Answer options

• A. Purchasing procedures are well designed and are followed unless otherwise directed by the purchasing supervisor.
• B. Pre-numbered blank purchase orders are secured within the purchasing department.
• C. Normal operational purchases fall in the range from $500 to $1, 000 with two signatures required for purchases over $1, 000.
• D. The purchasing agent invests in a publicly traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.

Correct answer: A

Explanation

Option A highlights a control weakness as it indicates that established procedures may be disregarded based on a supervisor's direction, compromising the integrity of the purchasing process. The other options illustrate proper controls, such as securing purchase orders, implementing signature requirements, and maintaining operational purchase limits, which do not present control weaknesses.