The purpose of separating the duties of hiring personnel and distributing payroll checks is to separate the
A) Authorization of transactions from the custody of related assets.
B) Operational responsibility from the record-keeping responsibility.
C) Human resources function from the controllership function.
D) Administrative controls from the internal accounting controls.

Question

Quizplus · Accepted Answer

Separating the duties of hiring personnel and distributing payroll checks is a form of segregation of duties, which is an important internal control measure. It helps to prevent one person from having too much control or influence over a particular business process. Specifically, separating authorization from custody helps to reduce the risk of fraud or error, since it requires multiple people to be involved in key decisions and actions related to the hiring and payroll processes. This enhances the overall reliability and integrity of the financial reporting process. The other answer choices, while they have some relevance to internal control, are not as directly related to this specific control measure.

The Purpose of Separating the Duties of Hiring Personnel and Distributing