8 Required information Ch12 The Control Environment as it Relates to Inventory (L012-2] The Control Environment as it Relates to Inventory Part 2 of 2 Read the case and answer the questions that follow. 1.93/3.21 points awarded The control environment reflects a company's overall attitude, awareness, and actions of both management and the Board of Directors concerning the importance of control and how it's used in the company. CONCEPT REVIEW: It is important in testing any cycle to consider the control environment, especially when testing inventory given its weight in a manufacturing environment. Scored eBook References Part 2 - Concept Check 1 audit x 2 fraud 3 A commitment to competence with respect to plant personnel is important to ensure that the process is both effective and efficient. Purchasing and cash disbursements can provide lots of opportunity for by employees If purchasing employees are they may negotiate bad purchases or purchase terms for the company. If purchasing agents accept the entire purchasing cycle is compromised. Levels of authority in the manufacturing process need to be clearly competent x 4. kickbacks 5. communicated