Evaluate Internal Control Components Practice Test

A payroll authorization control requires written manager approval for all new hires before HR processes them in the system. Testing reveals that managers routinely approve new hires verbally without completing the required written form. Which conclusion is most appropriate?

An accounts payable control evaluation finds: purchase orders exist for 94% of transactions, receiving reports exist for 89% of transactions, and invoice approvals exist for 97% of transactions. The 11% of transactions missing receiving reports have an average amount of $8,500. Which assessment is most accurate?