Segregation of duties has an important role in providing for good quality internal controls.Which of the following segregation of duties improve controls over the inventory and distribution cycle?
A)The purchasing department should not be responsible for updating the economic order quantity.
B)The accounting staff should not be responsible for the data entry of vendor invoice detail.
C)The inventory transaction processing systems should not be accessible to the receiving department.
D)The purchasing department should not be responsible for authorizing the acquisition of or receiving the goods.

Question

Quizplus · Accepted Answer

Segregating the duties of authorizing the acquisition of goods and receiving them can prevent fraud and errors in the inventory and distribution cycle. This helps ensure that goods are being received and recorded accurately and that payments are only made for authorized purchases. Option A concerns the purchasing department's responsibility for updating economic order quantity, which is related to inventory management and not directly related to the segregation of duties in the inventory and distribution cycle. Option B refers to accounting staff responsibility for entering vendor invoice details, which is part of accounts payable process rather than the inventory and distribution cycle. Option C refers to the security of the inventory transaction processing systems and does not directly pertain to the segregation of duties.

Segregation of Duties Has an Important Role in Providing for Good