Part 1The control procedure of canceling the documents in a voucher package is designed to reduce the risk of ________. Part 1
A. making duplicate payments B. paying for items not received C. fraudulent cash disbursements D. failure to take advantage of discounts for prompt payment E. theft of inventory

Question

Part 1The control procedure of canceling the documents in a voucher package is designed to reduce the risk of​ ________. Part 1
A. making duplicate payments B. paying for items not received C. fraudulent cash disbursements D. failure to take advantage of discounts for prompt payment E. theft of inventory

BlackTom AI · Accepted Answer

When examining internal controls related to voucher packages and the control procedure of canceling documents, we assess which risk is most directly mitigated by this practice.
Option A: 'making duplicate payments' — This is the primary risk addressed by canceling or cross‑referencing documents in a voucher package. If the supporting documents are properly canceled, it helps prevent paying the same invoice more than once by ensuring each payment corresponds to a single, verified set of documents. This reasoning aligns with standard purchasing and accounts payable controls.
Option B: 'paying for items not received' — While voucher controls can help detect discrepancies between what was received and what was billed, canceling documents alone is not the strongest mechanism for preventing paying for items not received; other procedures like receiving reports and three-way matching are more directly focused on this risk.
Option C: 'fraudulent cash disbursements' — Canceling documents is a component of preventing improper disbursements, but this risk is broader and typically addressed by multiple controls (authorization, segregation of duties, surprise cash counts). Relying solely on document cancellation does not fully encompass the prevention of all fraudulent disbursements.
Option D: 'failure to take advantage of discounts for prompt payment' — This risk concerns timing and calculation of discounts, not the validation of documents or cancellation procedures. voucher cancellation does not directly ensure optimal discount capture; terms adherence and early payment policies play larger roles here.
Option E: 'theft of inventory' — Inventory theft relates to physical goods and their custody, which is not controlled by the process of canceling vouchers in the accounts payable cycle. This control does not address inventory custody directly.
In summary, among the options, the practice of canceling documents in a voucher package most directly targets preventing duplicate payments, since it ties together the authorization and verification steps required to ensure a payment is not issued more than once. The other options describe risks that are addressed by different controls or by broader, more comprehensive procedures than document cancellation alone.

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