In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the operations accountant is responsible for safeguarding and maintaining the pipe inventory and also to record inventory transactions into the journal. A separate accounting clerk keeps records of the cash receipts and payments. The treasurer signs cheques and approves contracts.
A)Separation of duties
B)Documents and records
C)Assignment of responsibilities
D)Competent, reliable, and ethical personnel

Question

Quizplus · Accepted Answer

The operations accountant should not be responsible for both maintaining the inventory and recording inventory transactions, as this creates a conflict of interest and increases the risk of errors or fraud. Separation of duties would require different individuals to handle these tasks to ensure checks and balances.

In the Following Situation, Which Internal Control Procedure Needs Strengthening