Question

Which of the following is an accurate statement relating to separation of duties?

A) Management should deny cash access to anyone responsible for entering sales and cash receipts transaction information into the computer.
B) All disagreements on the monthly statements should be directed to a designated person who has no responsibility for handling cash or recording sales or accounts receivable.
C) The credit granting function should be separate from the sales function.
D) All of the above are accurate statements.

Answer 1

The accurate statement relating to separation of duties is option B) All disagreements on the monthly statements should be directed to a designated person who has no responsibility for handling cash or recording sales or accounts receivable.

Step-by-step explanation:

The accurate statement relating to separation of duties is option B) All disagreements on the monthly statements should be directed to a designated person who has no responsibility for handling cash or recording sales or accounts receivable.

Separation of duties is an important internal control mechanism that helps prevent fraud and errors in organizations. By assigning different responsibilities to different individuals, the risk of collusion and the ability to cover up fraudulent activities is reduced.

In this case, having a designated person who is not involved in cash handling or sales recording review and resolve disputes related to the monthly statements ensures an independent and objective assessment of the financial transactions.