Flood Inc. splits job functions in the expenditures cycle among three departments. The purchasing department prepares and sends a purchase order to the vendor. The receiving department accepts the delivery of goods from the vendor. Accounts payable prepares the documentation for recording a payable and requesting payment.

Which of the following statements is true?

Multiple Choice

• Flood Inc. has reduced the risk that an employee could steal from the company by ordering and receiving goods for personal use and having the company pay for the goods.

• Flood Inc. is wasting resources by unnecessarily segregating related job functions.

• Flood Inc. has reduced the risk that vendor accounts will become bad debts by properly segregating duties.

• Flood Inc.s operations are likely inefficient because it is using too many departments to perform basic tasks.