CAPA Expense Management Flashcards

What is the purpose of an expense reimbursement cutoff at period end?

Answer: To ensure expense reimbursements are recorded in the correct accounting period

Expense reimbursement cutoffs ensure that employee expenses are recorded in the period when the business activity occurred, consistent with the matching principle.

Which practice best prevents conflict of interest in expense report approvals?

Answer: Requiring approval from a supervisor at a higher level than the submitter

Requiring a higher-level supervisor to approve expense reports prevents self-approval and reduces the risk of improper or inflated reimbursements.

What is 'expense creep' in the context of expense management?

Answer: The gradual escalation of employee expense submissions beyond policy norms over time

Expense creep refers to the slow, incremental increase in employee expense submissions that individually seem minor but collectively exceed policy limits or historical norms.

What is the typical company policy for how soon employees must submit expense reports?

Answer: Within 30 to 60 days of the expense

Most companies require expense reports to be submitted within 30-60 days of incurring the expense to ensure timely recording and maintain effective controls.

Which control ensures corporate card spending is for authorized business purposes?

Answer: Monthly corporate card statement review and reconciliation by cardholders

Requiring cardholders to review and reconcile their monthly statements ensures all charges are reviewed by the person best positioned to identify unauthorized or personal charges.

What is the role of accounts payable in processing employee expense reimbursements?

Answer: Verifying expense reports comply with policy and issuing reimbursement payments

AP reviews submitted expense reports for policy compliance and documentation adequacy, then processes the approved reimbursement payments to employees.