Question

Which of the following does not violate separation of duties?

a. Approving purchase orders and receiving items ordered.
b. Approving payment to vendors and completing the monthly bank reconciliation.
c. Receiving checks in the mail and maintaining the cash receipts journal.
d. Writing checks and receiving checks in the mail.

Answer 1

The correct answer is option b. Approving payment to vendors and completing the monthly bank reconciliation.

Step-by-step explanation:

Separation of duties is an important principle in internal control that aims to prevent fraud and errors by dividing key tasks and responsibilities among different individuals. This ensures that no single person has complete control over a transaction from start to finish.

Option a violates separation of duties because the same person who approves purchase orders should not also be involved in receiving the items ordered to prevent conflicts of interest. Option c violates separation of duties because the same person who receives checks in the mail should not also be responsible for maintaining the cash receipts journal. Option d violates separation of duties because the same person who writes checks should not also be receiving checks in the mail.