Separation of responsibilities is essential in the control procedures for both cash inflows and cash outflows.

Question

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Separation of responsibilities helps to ensure that no one person has complete control over cash inflows or outflows, which reduces the risk of fraud or errors. For example, one person might be responsible for receiving and depositing cash, while another person is in charge of recording the transaction in the accounting system. Similarly, one person might be responsible for approving payments, while another person is responsible for writing and signing the checks. By dividing up these responsibilities, there are checks and balances in place to prevent mistakes or intentional misuse of funds.

Separation of Responsibilities Is Essential in the Control Procedures for Both