A company ensures that the person who authorises purchase orders is not the person who receives the goods or approves payment. Which internal control principle is this?
Answer and explanation
Correct answer: A. Segregation of duties
- Step 1: Splitting key tasks between different people means that fraud or error needs collusion.
- Step 2: This is segregation of duties.
Answer
Segregation of duties.
Why not the others: Physical access controls: Physical controls restrict access to assets and premises. Rotation of duties: Rotation moves staff between jobs periodically. Independent reconciliation: Reconciliation compares records from different sources.
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