Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates
A) documentation procedures are violated.
B) independent internal verification is violated.
C) segregation of duties is violated.
D) establishment of responsibility is violated.

Question

Quizplus · Accepted Answer

Segregation of duties requires that different individuals should be responsible for different stages of a transaction or activity to reduce the risk of errors or fraud. In this case, Jolene performs two critical duties that should be performed by different individuals to avoid the risk of errors or fraud. Maintaining the accounting record of inventory and being a warehouse custodian conflict with each other and raise questions about Jolene's accuracy, honesty, and reliability in performing both duties. This violation of segregation of duties poses a risk to the inventory's accuracy and completeness, and fraud might go undetected or unreported.

Jolene Is Warehouse Custodian and Also Maintains the Accounting Record