Final answer:
Yes, permitting warehouse staff to maintain the only inventory records violates separation of duties. It is important to have multiple individuals involved in maintaining the records to ensure accountability and reduce the risk of fraud or errors.
Step-by-step explanation:
Yes, permitting warehouse staff to maintain the only inventory records violates separation of duties. Separation of duties is a principle of internal control that aims to prevent fraud and errors by ensuring that no single individual has complete control over a business process from beginning to end. By allowing warehouse staff to maintain the only inventory records, there is a lack of segregation and potential for manipulation or errors in the records without appropriate checks and balances.
A more effective approach would be to have multiple individuals involved in maintaining inventory records, with different roles such as receiving, storing, and accounting for inventory. This would provide a greater level of accountability and reduce the risk of fraud or errors.
For example, a business could have a separate receiving department responsible for verifying the accuracy of incoming shipments and recording them in the inventory system. Another department could be responsible for physically storing and organizing the inventory. Finally, an accounting department could be responsible for reconciling the physical inventory with the recorded inventory and preparing financial reports.