If the purchasing, receiving, accounts payable, and cash disbursements processes are completed by the same individuals, the internal controls will be stronger because someone in the company will have an overall view of company activities.

Question

Quizplus · Accepted Answer

When one person is responsible for multiple processes, there is a higher risk of fraud and errors going undetected. It is important to have segregation of duties and different individuals responsible for each process to ensure internal controls are effective.

If the Purchasing, Receiving, Accounts Payable, and Cash Disbursements Processes