B is corrent because scrap sales are generally irregular in nature and these sales often are inadequately controlled by the internal control. This lack of adequate internal control makes it difficult for the auditor to detect any irregularities.
A is incorrect because transactions involving purchase returns are frequently recurring business transactions which are under the internal control. Adequate internal controls will allow the auditor to detect the diversion of proceeds more easily.
C is incorrect because transactions involving COD sales are frequently recurring business transactions which are under the internal control. Adequate internal controls will allow the auditor to detect the diversion of proceeds more easily.
D is incorrect because transactions involving dividends are frequently recurring business transactions which are under the internal control. Adequate internal controls will allow the auditor to detect the diversion of proceeds more easily.
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