You are discussing internal controls with your client. You noticed that they lack any sort of review over the receipt of incoming goods that have been purchased. During your engagement you pulled an invoice for the purchase of a laptop but when you inquired to the purchasing department regarding the receipt of the laptop, nobody could seem to recall who received it or where the laptop was now.
When you bring this to the controllers attention she dismisses it and states that she is sure that it is around somewhere and being used for business purposes. You point out that you are not trying to make any accusations but that there may be a control and fraud risk if there are no controls over receiving of goods purchased by the organization. You point out that without some sort of receiving process how can she be certain that the organization ever actually received the laptop that they paid for?
The controller responds that she trusts all her staff so she doesn't have to worry about one of them picking up company assets and walking off with them.
