Proper segregation of functional responsibilities calls for separation of
A) authorization, execution, and payment.
B) authorization, recording, and custody.
C) custody, execution, and reporting.
D) authorization, payment, and recording.

Question

Quizplus · Accepted Answer

The principle of segregation of duties is designed to prevent fraud and errors. This is achieved by ensuring that no single individual has control over all aspects of any financial transaction. Therefore, the correct segregation involves separating authorization (the decision to carry out the transaction), recording (documenting the transaction), and custody (handling the assets involved in the transaction). This separation helps in reducing the risk of errors or fraud by requiring more than one person to complete tasks.

Proper Segregation of Functional Responsibilities Calls for Separation of