Final answer:
The purpose is to separate the authorization of transactions from the custody of related assets, which is crucial for preventing fraud and misappropriation of funds in a business environment.
Step-by-step explanation:
The purpose of segregating the duties of distributing payroll checks and hiring personnel is to: D. Separate the authorization of transactions from the custody of related assets. This principle is a key aspect of internal control practices in businesses, safeguarding against fraud and promoting accountability. For instance, in a modern business such as a restaurant, a clear division of labor exists with distinct roles like top chef, sous chefs, servers, and a business manager who handles paychecks. While each role is critical for the establishment’s success, segregation of duties ensures that the person authorizing transactions, such as hiring personnel, is not the same individual who has custody of the business’s assets, thereby preventing potential conflicts of interest or misappropriation of funds. To illustrate, the top chef focuses on food quality while the business manager oversees financial aspects, including distribution of payroll checks, ensuring a smart division of labor.