Due to a software malfunction, a company agrees to ship 10 computers to an agricultural supply store but instead ships 10 bags of fertilizer. This exemplifies a risk for which tran... Due to a software malfunction, a company agrees to ship 10 computers to an agricultural supply store but instead ships 10 bags of fertilizer. This exemplifies a risk for which transaction?
Understand the Problem
The question describes a scenario where a software malfunction leads to the wrong goods being shipped. You need to identify which transaction faces a risk in this situation.
Answer
Delivering goods
The risk exemplified is for 'Delivering goods'. The company intended to deliver computers but instead delivered fertilizer, indicating a failure in the delivery process.
Answer for screen readers
The risk exemplified is for 'Delivering goods'. The company intended to deliver computers but instead delivered fertilizer, indicating a failure in the delivery process.
More Information
This question assesses understanding of transaction-related risks, particularly in the context of internal controls and accounting processes.
Tips
A common mistake is to focus on the initial agreement (recording sales) rather than the actual action of delivering the incorrect goods.
Sources
- Auditing Chapter 6.docx.pdf - CHAPTER 6 Define internal... - coursehero.com
- Auditing Chapter 6.docx - CHAPTER 6 Define internal control... - coursehero.com
AI-generated content may contain errors. Please verify critical information
