Proper Separation of Duties Reduces the Opportunities to Allow Persons

question 4

Multiple Choice

Proper separation of duties reduces the opportunities to allow persons to be in positions to both:

• A)journalize entries and prepare financial statements.
• B)record cash receipts and cash disbursements.
• C)establish internal controls and authorize transactions.
• D)perpetrate a fraud and then conceal it in the books.

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Definitions:

ABA Code

A nine-digit identification number assigned to banks in the United States by the American Bankers Association, used for routing checks and electronic payments.

Federal Reserve District

One of the twelve regions established by the Federal Reserve Act, each with a Federal Reserve Bank, to regulate and oversee banking operations in the United States.

Routing Number

A unique nine-digit code used to identify a banking institution in the United States, essential for processing electronic transfers and checks.

Internal Control

A system of policies and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.