If a manufacturing company”s inventory of supplies consists of a large number of small items, which of the following would be considered a weakness in internal controls?
- Supplies of relatively low value are expensed when acquired.
- Supplies are physically counted on a cycle basis, whereby limited counts occur quarterly and each item is counted at least once annually.
- The stores function is responsible for updating perpetual records whenever inventory items are moved.
- Perpetual records are maintained for inventory items only if they are significant in value.