Question

Which of the following generally would be considered good internal control of cash disbursements?

a) Allowing multiple employees to approve payments
b) Requiring only one signature on all checks
c) Implementing a dual-signature requirement for large payments
d) Streamlining the approval process for faster payments

Answer 1

Implementing a dual-signature requirement for large payments is generally considered a good internal control of cash disbursements.

Step-by-step explanation:

The correct answer is c) Implementing a dual-signature requirement for large payments. Implementing a dual-signature requirement for large payments is generally considered good internal control of cash disbursements. This control ensures that multiple individuals are involved in the payment approval process, reducing the risk of fraudulent activities and errors. By requiring two signatures, it adds an extra layer of scrutiny and accountability.

Allowing multiple employees to approve payments, as mentioned in option a), can lead to a lack of accountability and potential collusion between employees. Requiring only one signature on all checks, as mentioned in option b), poses a higher risk of unauthorized or fraudulent payments. Streamlining the approval process for faster payments, as mentioned in option d), may compromise the accuracy and thoroughness of the payment approval process.