Question

Bank employees use a system known as the "maker-checker" system. An employee will record an entry in the appropriate journal, and then a supervisor will verify and approve the entry. These days, as all of a bank’s accounts are computerized, the employee first enters a batch of entries into the computer, and then the entries are posted automati- cally to the general ledger account after the supervisor approves them on the system. Access to the computer system is password-protected and task-specific, which means that the computer system will not allow the employee to approve a transaction or the supervisor to record a transaction. Instructions Identify the principles of internal control inherent in the "maker-checker" procedure used by banks.

Answer 1

Segregation of duties

Step-by-step explanation:

Segregation of duties is a system of internal control practice where tasks are broken down into different steps with different individual or department handling different steps.

The aim is to provide an oversight and review of action to minimize frauds and errors. With this method , it becomes difficult for an individual to perpetrate and conceal fraudulent activities.

The breaking down of recording and approving transaction between the employee and the supervisor conforms with the practice of segregation of duties.