ICAEW ARF · Chapter 4 · Question 4 of 12
Which of the following combinations of duties shows the most serious lack of segregation of duties?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) One employee both receives customer cheques and maintains the receivables ledger
Explanation
Good segregation separates custody of assets from recording of the related transactions. An employee who handles cheques and maintains the receivables ledger could steal receipts and conceal it by manipulating customer accounts, for example by teeming and lading. The other combinations involve two different people at the key stages.
More Internal control systems and IT controls MCQs
- Q6A computerised sales system performs a sequence check on sales invoice numbers. What is the main purpose of this control?
- Q7Two cheque signatories, each required to approve every payment, agree together to sign payments to a fictitious supplier they have set up…
- Q8Which of the following is a test of control?
- Q9How should an auditor communicate significant deficiencies in internal control identified during an audit?
- Q10Which of the following would NOT normally be included in an auditor's report to management on internal control deficiencies?