Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 221

Which of the following control methods is effective in reducing the risk of purchasing-scheme fraud?
1. Periodically reviewing the vendor list for unusual vendors and addresses.
2. Segregating duties for amount purchasing, receiving, shipping, and accounting.
3. Validating sequential integrity of purchase orders.
4. Verifying the validity of invoices with post office box addresses.

Answer options

• A. 1 and 2 only
• B. 3 and 4 only
• C. 1, 2, and 4 only
• D. 1, 2, 3, and 4

Correct answer: B

Explanation

Options 3 and 4 are effective in reducing purchasing-scheme fraud as they focus on validating the integrity of purchase orders and verifying invoices linked to post office boxes, which can be red flags. Options 1 and 2, while helpful for oversight and segregation of duties, do not address the specific validation processes necessary to combat fraud as directly as options 3 and 4 do.