The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the
A) administrative controls from the internal accounting controls.
B) human resources function from the controllership function.
C) operational responsibility from the record-keeping responsibility.
D) authorization of transactions from the custody of related assets.

Question

Quizplus · Accepted Answer

Segregating the duties of hiring personnel and distributing payroll checks is a classic example of separating the authorization of transactions (hiring and paying employees) from the custody of related assets (payroll checks). This helps to prevent fraud, errors, or other irregularities by ensuring that no one person has complete control over both aspects. This is an important internal control mechanism for ensuring the integrity of financial information and protecting the organization's assets. Options A, B, and C may also be valid reasons for segregating duties, but they are not directly relevant to the specific scenario described in the question.

The Purpose of Segregating the Duties of Hiring Personnel and Distributing