Question

Midwest University Medical Center reimburses professors and students for travel expenses when they go to national meetings. Because the university is not allowed to reimburse individuals for alcohol consumed with meals, the university requires professors and students to turn in detailed meal receipts in order to be reimbursed for meals. This practice decreases fraudulent activity by supporting which principle of control activities?

Answer 1

This practice decreases fraudulent activity by supporting documentation procedure principle of control activities.

Explanation:

In professional and educational institute there is a norm to give transport allowance and dearness allowance for attending educational trip, assignments or meetings. But for that the party need to show valid receipt of tickets, fooding and lodging bill. Otherwise some disloyal person will take advantage of it and will try to withdraw more money by not showing the actual spent amount.

Here University medical center is giving reimburse for travel expenses and meal for attending a medical conference. But for that the receipt of meal is required otherwise many of the professors and students will take the charges of alcohol by adding it's price with the meal. So, documentation procedures need to be followed to avoid this discrepancy.