Match the segregation of duties for investments with the misstatement (due to error or fraud)it can help prevent.
-Custody of the securities is separate from accounting for the securities

Question

Match the segregation of duties for investments with the misstatement (due to error or fraud)it can help prevent. 
-Custody of the securities is separate from accounting for the securities

Quizplus · Accepted Answer

By separating custody from accounting, it makes it more difficult for an individual to conceal a theft of securities, as multiple people would be involved in the process.

Answer: A 
 Separating custody from accounting can help prevent an individual from improperly recording securities values or not reporting the values to management, as multiple people would be involved in the process.

Answer: C 
 Separating custody from accounting can help prevent an individual from concealing any defalcation that would normally be detected by reconciliation of subsidiary records with general ledger control accounts, as multiple people would be involved in the process.

Answer: D 
 Separating custody from accounting would not necessarily prevent an individual from making fictitious transactions, as they can still manipulate the accounting records. Other controls, such as authorization and approval, would be necessary to prevent fictitious transactions.

Match the Segregation of Duties for Investments with the Misstatement