Question

The financial management of a company should take steps to see that company's investment securities are protected. Which of the following is not a step that is designed to protect investment securities?

1) Securities should be registered in the name of the owner.
2) Access to securities should be vested in more than one person.
3) Custody of securities should be assigned to persons who have the accounting responsibility for securities.
4) Securities should be properly controlled physically in order to prevent unauthorized usage.

Answer 1

Access to securities should be vested in more than one person is not a step designed to protect investment securities.

Step-by-step explanation:

Out of the given options, the step that is not designed to protect investment securities is Access to securities should be vested in more than one person. This is because having multiple persons with access to securities may increase the risk of unauthorized usage or potential internal fraud. The other steps mentioned, such as registering securities in the name of the owner, assigning custody of securities to persons with accounting responsibility, and physically controlling securities to prevent unauthorized usage, are all measures intended to protect investment securities.