A Company's Accountant Was Able to Approve Payment of Invoices

question 17

Multiple Choice

A company's accountant was able to approve payment of invoices and write company checks to a family member, with whom the accountant would split the proceeds.The accountant covered up the theft with journal entries in the AIS.Which duties should be separated to prevent such problems in the future?

• A)Authorization and custody
• B)Custody and recordkeeping
• C)Authorization and recordkeeping
• D)Control environment and control activities

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Definitions:

Optimal Distinctiveness

A theory that suggests people are motivated to achieve an ideal balance between inclusion within groups and differentiation from others.

Deindividuated

A psychological state in which an individual loses self-awareness and the sense of individuality, often leading to uncharacteristic behavior, usually within a group context.

Duplex Mind

The duplex mind is a concept in psychology that suggests the human mind operates on two levels: an automatic, unconscious level and a controlled, conscious level.

Approach Versus Inhibition

A psychological construct that describes the tendency of individuals to move towards rewards or positive experiences (approach) or away from punishments or negative experiences (inhibition).