Separation of Duties Is an Internal Control Technique That Requires

question 22

Multiple Choice

Separation of duties is an internal control technique that requires all of the following except:

• A) Any individuals who have physical custody over cash should not also handle accounting records.
• B) Any employees handling cash should not have access to ledger accounts and bank statements.
• C) Any employee with custody of cash should also reconcile the bank statements to the ledger accounts but should not handle the accounting for cash.
• D) The responsibility for approving, signing, and mailing checks and handling cash disbursement documents and records should be separate functions.

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Definitions:

Full Employment

A situation where all available labor resources are being used in the most efficient way possible, leading to no cyclical unemployment.

Frictional Unemployment

Short-term unemployment that arises from the process of workers moving between jobs or into the workforce.

Structural Unemployment

A form of unemployment caused by a mismatch between the skills that workers in the economy can offer and the skills demanded by employers.

Structural Unemployment

Refers to unemployment caused by structural changes in the economy such as technological advances, which create mismatches between the skills workers have and the skills needed for available jobs.