Match the Segregation of Duties for Investments with the Misstatement

question 9

Multiple Choice

Match the segregation of duties for investments with the misstatement (due to error or fraud) it can help prevent. 
-Custody of the securities is separate from accounting for the securities

• A)An individual can improperly record securities values or not report the values to management
• B)An individual can conceal a theft of securities
• C)An individual can conceal any defalcation that would normally be detected by reconciliation of subsidiary records with general ledger control accounts
• D)An individual can make fictitious transactions

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Definitions:

Economic Efficiency

A condition where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Ability-To-Pay Principle

The ability-to-pay principle in taxation suggests that taxes should be levied based on an individual's or entity's capacity to pay, meaning those with higher income should pay more.

Cigarette Taxes

Taxes imposed on the sale of cigarettes to discourage consumption and raise government revenue, often used for public health initiatives.

Wedge

The difference between the demand price of the quantity transacted and the supply price of the quantity transacted for a good when the supply of the good is legally restricted. Often created by a quantity control, or quota.