In a properly designed internal control system, the same employee may be permitted to:
A)receive and deposit checks and also approve write-offs of customer accounts.
B)approve vouchers for payment and also sign checks.
C)reconcile the bank statements and also receive and deposit cash.
D)sign checks and also cancel supporting documents.

Question

Quizplus · Accepted Answer

Option D is correct because signing checks and canceling supporting documents can be part of a proper segregation of duties if other controls are in place to review and approve transactions before they reach the check-signing stage. This ensures that no single employee has control over the entire process from initiation to completion, which is a key principle in internal control systems to prevent fraud and errors.

In a Properly Designed Internal Control System, the Same Employee