Home › CA Final › financialreporting › Accounting and Technology — ICOFR-ERP Integration, Inventory, Derivatives & Segment Automation › Which of the following is the WEAKEST automated …
Which of the following is the WEAKEST automated control to detect potential inventory fraud under an Ind AS 2 / ICOFR environment?
AWorkflow-based approval of inventory adjustments based on materiality thresholds
BPeriodic system-generated reconciliation between physical counts and ERP records by location
CAnalytics on inventory turnover ratios, slow-moving stock and abnormal cost fluctuations
DYear-end visual stock take by warehouse staff alone, without reconciliation to ERP records
Answer & Solution
Correct answer: D. Year-end visual stock take by warehouse staff alone, without reconciliation to ERP records
A visual stock take without reconciliation back to the ERP is the weakest control — it does not detect under/over-statements in the ledger. Reconciliations, analytics on turnover and workflow approvals are all substantive ICOFR mechanisms.
Related questions
Which of the following is the MOST defensible position on whether automation can fully repNew Way Ltd. wants to (i) define enforceable-rights criteria for identifying contracts undA listed company's ICOFR weakness states 'no procedures to ensure all postings have occurrIdentify the BEST way to use spreadsheet automation under Ind AS 109 derivative classificaA Responsibility Assignment Matrix (RAM/RACI) is configured into the ERP for ICOFR. The BEIdentify the MOST appropriate use of the ERP audit trail comparing 'transaction date' vs 'An ERP integrates ICOFR for inventory. Which control combination BEST addresses the risk tAn entity sells broadband, voice and modem in various combinations. To codify Ind AS 115 d