Question

The single most effective control established to avoid allowing any person to be in a position

to perpetrate and then conceal errors or fraud is to

A. Establish separate functional responsibilities for asset custody, recordkeeping, and

authorization.

B. Require each employee to take a vacation each year.

C. Establish an internal auditing department.

D. Require the bonding of personnel in positions that necessitate handling of cash and other

universally desirable valuables.

Answer 1

The single most effective control established to avoid allowing any person to be in a position to perpetrate and then conceal errors or fraud is to Establish separate functional responsibilities for asset custody, recordkeeping, and authorization.

Establishment of responsibility and segregation of duties is important to not allow any person to be in a position to conceal errors or fraud.

It helps in maintaining proper checks and balances for each function and no single person remains in a commanding position.

Option A is correct