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Which of the following is an example of proper segregation of duties for an invoice payment?

a. Sarah authorizes the payment; Johanna inputs the data into the system and makes the payment.
b. Sarah and Luke both authorize the payment; Sarah inputs the data into the system; Johanna makes the payment.
c. Sarah authorizes the payment; Johanna and Luke both input data into the system; Luke makes the payment.
d. Sarah authorizes the payment; Johanna inputs the data into the system; Luke makes the payment.

1 Answer

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Final answer:

The example of proper segregation of duties for an invoice payment is when Sarah authorizes, Johanna inputs data, and Luke makes the payment. This segregates responsibilities and minimizes the risk of fraud.

Step-by-step explanation:

An example of proper segregation of duties for an invoice payment is option d. Sarah authorizes the payment; Johanna inputs the data into the system; Luke makes the payment. Segregation of duties is a key internal control that helps to prevent fraud and errors. This is because the responsibility for authorizing payments, recording transactions, and handling cash is divided among different individuals, reducing the risk of one person having too much control over financial transactions.

In option d, the duties are appropriately segregated to ensure that no single individual has control over multiple aspects of the transaction process. Sarah's role is limited to authorizing the payment, thus decreasing the likelihood of unauthorized transactions. Johanna's responsibility is to input data, which is a clerical task and should be separated from authorization and payment functions. Finally, Luke's duty to make the payment serves as a final check before money leaves the company, hence, adding an additional layer of security.

User Igor Bidiniuc
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