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1) A control procedure designed so that the employee that records cash received from customers does not also have access to the cash itself is an example of a(n)

A) preventive control.
B) detective control.
C) corrective control.
D) authorization control.

User Cvetelina
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Final answer:

The student's question pertains to a control procedure that separates the task of recording cash receipts from the task of handling cash, which is a preventive control designed to prevent fraud and ensure accurate financial records.

Step-by-step explanation:

The control procedure designed so that the employee who records cash received from customers does not also have access to the cash itself is an example of a preventive control. Preventive controls are designed to discourage errors or irregularities from occurring. They are a crucial aspect of the internal control system within a company, aimed at preventing fraud and ensuring the accuracy of financial records.

A detective control, on the other hand, identifies errors or irregularities after they have occurred. An example of a detective control could be a reconciliation process or regular audits.

Corrective controls are actions taken to fix the issues detected by detective controls. Lastly, authorization controls involve obtaining approval before executing transactions or changes within a system.

In this case, separating the responsibility of recording and handling cash is a fundamental principle of internal control, often referred to as segregation of duties, which is a type of preventive control.

User Katelynn
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