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An ERP integrates ICOFR for inventory. Which control combination BEST addresses the risk that a single employee inflates inventory by raising fictitious purchase orders, accepting goods and updating master data?
ASegregation of duties enforced in the ERP (separate users for PO initiation, receipt and master-data update) with role-based access and approval workflows tied to transaction value
BPermitting password sharing among finance staff for operational efficiency
CPeriodic external audit alone, since auditors are tasked with finding such issues
DAllowing the same user to perform all three actions and reviewing journals at year-end
Answer & Solution
Correct answer: A. Segregation of duties enforced in the ERP (separate users for PO initiation, receipt and master-data update) with role-based access and approval workflows tied to transaction value
SoD in the ERP combined with role-based access and value-tier approval workflows directly mitigates the single-employee fraud pattern. External audit is a detective control (point-in-time and high level) not a substitute; allowing one user to do everything (C) and password sharing (D) defeat the controls outright.
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