Accounts Payable Unit 4

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Questions and Answers

What is the main purpose of escalating approvals in a company's accounts payable process?

To automate reminders for approvals and maintain efficiency. (correct)

To ensure all invoices are sent directly to the president.

To eliminate the need for e-mail communication.

To reduce the number of invoices being processed.

Which of the following is NOT a benefit of using e-mail for invoice approvals?

Introduces competition among employees. (correct)

Facilitates automatic forwarding to next-level approvers.

Covers employees' sick days and vacations.

Provides a subtle pressure to comply with approval requests.

How should e-mails for discrepancy resolution be managed?

They should be designed to simplify the process and escalate if no response is received. (correct)

They should always escalate to the highest-level approver without notice.

They should only be sent once a week to avoid overload.

They should only be sent to the approver's personal email.

What happens if an approver fails to review invoices in a timely manner?

The invoice is automatically forwarded to the next-level approver. Signup and view all the answers

What is a key characteristic of company e-mail accounts?

The company has the right to monitor all communications. Signup and view all the answers

What should accounts payable associates remember about personal e-mails sent to corporate accounts?

Corporate policy regarding personal e-mails may change unexpectedly. Signup and view all the answers

What role do reminder messages play in the escalation of approvals?

They help inform approvers that the invoice needs attention. Signup and view all the answers

What is one reason an escalation process is beneficial during invoice approval?

It helps deter delays caused by vacation and sick days. Signup and view all the answers

What is the primary purpose of a three-way match in accounts payable?

To ensure that the ordered products match the receipt and invoice. Signup and view all the answers

Under which condition might a company assume receipt of goods?

When the invoice amount is below an agreed-upon threshold. Signup and view all the answers

What does the term 'negative assurance' refer to in accounts payable?

A process of paying invoices that lack complaints. Signup and view all the answers

Why might it be unnecessary to receive an invoice according to some accounts payable professionals?

If the purchase order and receiving dock processes are functioning properly. Signup and view all the answers

What is a potential drawback of using prolonged verification for low-value invoices?

It can lead to increased costs that exceed the product's value. Signup and view all the answers

Which of the following is a method some companies may use to manage invoice discrepancies?

Establishing a limit for assumed receipt. Signup and view all the answers

How do companies typically schedule payments for invoices when using assumed receipt?

Payments are scheduled according to predetermined payment terms. Signup and view all the answers

What might companies do if they do not hear back from the purchaser within the set timeframe regarding an invoice?

Assume the invoice is valid and proceed to pay it. Signup and view all the answers

What is an essential practice for managing check stock?

Keeping a log of the checks used Signup and view all the answers

Why should the signature plate of a check signing machine be secured?

To prevent duplication of the checks Signup and view all the answers

What risk is associated with using a rubber stamp to sign checks?

It increases the company's liability due to lack of care Signup and view all the answers

How can a company quickly identify fraudulent checks?

By comparing the color of checks received Signup and view all the answers

What is a key reason for the separation of check signer and check stock?

To prevent potential fraud and unauthorized access Signup and view all the answers

What common misconception may lead to increased vulnerability in check management?

Trusting longstanding employees without verification Signup and view all the answers

What is one of the suggestions for preventing vendor fraud?

Conducting background checks on vendors and employees Signup and view all the answers

What should NOT be done when handling checks to avoid facilitating fraud?

Store checks in a visible and accessible location Signup and view all the answers

What is the most basic use of the Internet in accounts payable?

E-mail communication with vendors Signup and view all the answers

How does imaging enhance the accounts payable process?

It allows for electronic approval. Signup and view all the answers

What problem can arise from the manual invoice approval process?

Duplicate payments Signup and view all the answers

What happens to the original invoice after it is imaged?

It can be kept in cold storage. Signup and view all the answers

What impact does e-mail have on the invoice approval process?

It provides an audit trail for approvals. Signup and view all the answers

In companies that use imaging and e-mail, what document is sent for approval?

An image of the invoice Signup and view all the answers

What factor can significantly impact the speed of invoice approval?

The location of the approver Signup and view all the answers

What advantage does using e-mail provide in the accounts payable process?

It facilitates efficient communication with vendors. Signup and view all the answers

Which of the following actions is NOT considered check fraud?

Using an authorized check for payment Signup and view all the answers

What has contributed to the increased prevalence of check fraud?

Advanced technology that makes copying checks easier Signup and view all the answers

Which of the following describes why criminals may prefer check fraud over violent crimes?

The risk of getting caught is perceived to be lower. Signup and view all the answers

Why might perpetrators of check fraud face lesser consequences than violent criminals?

The public often views white-collar crime as less harmful. Signup and view all the answers

What is one preventive measure companies can take to protect against check fraud?

Keep preprinted check stock under lock and key. Signup and view all the answers

What can make it easy for criminals to alter the amount on a check?

Inexpensive computers and color printers Signup and view all the answers

What is often true about the focus of law enforcement in relation to fraud crimes?

It mainly targets fraud as a lesser priority compared to violent crimes. Signup and view all the answers

What is a common misconception about white-collar crimes like check fraud?

They do not cause significant harm to individuals. Signup and view all the answers

Study Notes

Using the Internet in Accounts Payable

Email is essential for communication between accounts payable and vendors, facilitating electronic invoice submission.
Imaging technology paired with email streamlines invoice approval, reducing reliance on physical paperwork.
Audit trails are created through email communications, ensuring accountability in the approval process.
Escalating approvals help manage timely invoice approval, notifying higher-level approvers if initial approvals are delayed.
E-mails can also efficiently handle discrepancy resolutions, with escalation procedures established for unresponsive parties.

Fraud: Vendor, Employee, and Check

Check Fraud Techniques:
- Alteration of authorized checks.
- Forgery of signatures (maker and payee).
- Creation of unauthorized check stock.
- Issuing drafts without delivering goods.
Reasons for Increased Check Fraud:
- Low-cost technology enables easy replication and alteration of checks.
- Minimal police focus on fraud, leading to a perception of low risk for offenders.
- Overcrowded prisons reduce the likelihood of serving time for white-collar crimes.

Company Measures Against Check Fraud

Secure storage of preprinted check stock with restricted access.
Regular audits and monitoring of check usage, with surprise checks by auditors.
Separation of responsibilities among employees to minimize fraud risks.
Avoidance of rubber stamp signatures, maintaining bank liability.

Identifying Fraudulent Checks

Fast identification increases chances of fund recovery; check for color consistency and perforation presence on checks.

Vendor Fraud

Ranges from collusion with existing vendors to minor scams involving low dollar amounts.

High-Level Accounts Payable Concepts

The three-way match process ensures high-dollar transactions align with delivery quality and quantity.
Handling low-value invoices may require less effort, utilizing:
- Assumed Receipt: Automatically assume receipt if the invoice is under a certain dollar amount, expediting payments after notifying the buyer.
- Negative Assurance: Pay invoices if no objections are raised within a specified timeframe.
Properly filled purchase orders and thorough receiving checks can minimize payment discrepancies, reducing the need for invoices.

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Description

Explore the crucial role of the internet in accounts payable during Week 4 of your studies. This quiz covers high-level concepts related to vendor and employee fraud, as well as the fundamental use of email in the accounts payable process. Enhance your understanding of how technology integrates with financial operations.