Question

A hospital system ordered 5,000 masks from a supplier. The supplier accidentally sent only 4,000 masks, but the receiving department at the hospital system company accepted the shipment, marking the purchase order as completely received. The invoice was eventually received for the original 5,000 masks. The hospital system paid the entire amount. Which of the following controls would have been most likely to have prevented this erroneous payment?

Multiple Choice

A) Personnel in cash disbursements department should compare the check that is prepared to all of the backup documentation.

B) Personnel in the accounts payable department should compare the receiving report to the purchase invoice before creation of the voucher.

C) Personnel in the furniture company's purchasing department should compare the purchase requisition with the purchase order.

D) The hospital system should have required the receiving department to perform a blind count.

Answer 1

This situation indicates clearly that there is lack of internal control and proper check in the systems of hospitals

The purchase department is extremely careless and not responsible for their duty

Payments are generally made via the accounting department and the purchases are recorded by the purchase department

The correct answer to the above question is Option B

"Personnel in the accounts payable department should compare the receiving report to the purchase invoice before creation of the voucher"

It is the duty to compare the product received physically with the receipt of payment being issued , otherwise it may lead to frauds, carelessness and many more things