At Radiant, Inc., the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. Which internal control procedure needs strengthening?

Question

Quizplus · Accepted Answer

The internal control procedure that needs strengthening is the separation of duties. Having the sales department responsible for recording cash transactions creates a situation where the same individuals have control over both the cash and the record-keeping for the cash, which increases the risk of errors, fraud, and misappropriation of funds. It is important to have a separation of duties where one department or individual is responsible for handling cash while another is responsible for recording any cash transactions to increase accountability and reliability of financial data.