Explain Why It Is Important to Segregate Duties of Employees

question 107

Essay

Explain why it is important to segregate duties of employees dealing with cash in an organization. Provide an example of ways which this segregation could be made on the payables side

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit customers by comparing net credit sales to the average accounts receivable.

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a certain period. It indicates the efficiency of inventory management.

Cash Inflows

Money that is received by a company from its various business activities, including sales, financing, or investments.

Operating Cash Flow

Operating Cash Flow refers to the cash generated from a company’s normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.