Certified Information Systems Auditor (CISA) — Question 471

A warehouse employee of a retail company has been able to conceal the theft of inventory items by entering adjustments of either damaged or lost stock items to the inventory system. Which control would have BEST prevented this type of fraud in a retail environment?

Answer options

• A. Statistical sampling of adjustment transactions
• B. Separate authorization for input of transactions
• C. An edit check for the validity of the inventory transaction
• D. Unscheduled audits of lost stock lines

Correct answer: B

Explanation

The correct answer is B, as requiring separate authorization for transaction inputs ensures that no single employee has complete control over inventory changes, thereby reducing the risk of fraud. Options A and D may help in detecting issues but do not prevent unauthorized adjustments. Option C could validate transactions but does not address the authorization aspect, leaving room for potential fraud.