A cash disbursement clerk issues a cheque that has been approved by the treasurer.This is an example of:
A)Separating record-keeping from asset custody
B)Separating transaction processing to transaction authorisation
C)Separating asset custody from transaction processing.
D)Separating transaction authorisation from record-keeping.

Question

Quizplus · Accepted Answer

The separation of transaction processing to transaction authorisation means that the person who is responsible for issuing the cheque (the cash disbursement clerk) is different from the person who approves the cheque (the treasurer), thus ensuring that there is a dual control system in place to prevent fraud or errors. This is a best practice for internal control.

A Cash Disbursement Clerk Issues a Cheque That Has Been