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I am having trouble with MCQs regarding segregation of duties. Particularly questions asking about the treasurer of a company. For example, Question #221, from Ninja AUD MCQs:
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Which of the following internal control procedures is not usually performed in the treasurerās department?
A. Verifying the accuracy of checks and vouchers
B. Controlling the mailing of checks to vendors
C. Approving vendors’ invoices for payment (Correct Answer)
D. Canceling payment vouchers when paid
Incompatible functions are those that place any person in a position to both perpetrate and conceal errors or fraud in the normal course of their duties. Therefore, a well-designed plan of organization separates the duties of authorization, record keeping, and custody of assets. The treasurer generally would perform the other procedures. Editor note: The treasurer in this circumstance would have received and reviewed the approved invoice and relevant documentation prior to signing the check.
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I had incorrectly chosen B. Controlling the mailing of checks to vendors. I knew this was a question about segregation of duties, and that no one position should have control of authorization, record keeping, and custody of assets. Looking at the options I would think A, C, and D are part of authorization, and B would be custody of assets, which would overlap with authorization and therefore should be separated. Wouldn’t 3 of the options have to fall into one of the categories(authorization, record keeping, & custody of assets) and the 4th be the incompatible function? Or would some of the options simply not fall into those categories? In this example, I see “Verifying”(A.) and “Approving”(C.) as both being apart of Authorization, yet they list C. as the correct answer. What am I looking at incorrectly?AUD - NINJA in Training
BEC - 86
FAR - 89
REG - 85Do or do not, there is no try.
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