Which of the following most likely would be the result of ineffective internal control in the revenue cycle? Fraud in recording transactions in the subsidiary accounts could result in a delay in goods shipped. Fictitious transactions could be recorded, causing an understatement of revenues and an overstatement of receivables. Final authorization of credit memos by personnel in the sales department could permit an employee defalcation scheme. Omission of shipping documents could go undetected, causing an understatement of inventory.

The correct answer is Final authorization of credit memos by personnel in the sales department could permit an employee defalcation scheme.

Explanation:

Having control of the credit notes is very important for the company, as if it were any other accounting document.

The credit note in accounting is the document that is made in order to cancel the invoices because the law establishes that the invoices made cannot be eliminated under any circumstance, so when an invoice has an error, this voucher is created for the value of the invoice in negative.

The realization of this proof of purchase must be in the hands of the sellers or the company that provides the service or markets a product: and will be addressed to the customer who requested return or changes of the invoice.