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

Question

Quizplus · Accepted Answer

Segregating the duties of hiring personnel and distributing payroll checks is a classic example of separation of the authorization of transactions (hiring and payroll distribution) from the custody of related assets (payroll checks). This separation helps to prevent fraudulent or erroneous payouts, which can occur when the same person has both authorization and custody of the relevant assets. While the other answer choices may be valid objectives of internal controls, they are not directly related to the purpose of segregating these particular duties.

The Purpose of Segregating the Duties of Hiring Personnel and Distributing