In a System of Proper Internal Controls, the Same Employee

question 13

Multiple Choice

In a system of proper internal controls, the same employee should not be allowed to:

• A)Sign checks and cancel the supporting voucher package
• B)Receive goods and prepare the related receiving report
• C)Prepare voucher packages and sign checks
• D)Initiate purchase requisitions and inspect goods received

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Definitions:

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Mutual Consideration

The reciprocal exchange of value or promises within a contract, where each party agrees to give up something in return for receiving something else of value.

Subrogation

The process by which one party takes over the rights of another party, typically in the context of insurance claims.

Double Recovery

The act of obtaining compensation from two different sources for the same injury, loss, or damages, which is legally prohibited.