Which of the Following Controls Would Be Most Effective in Assuring

question 49

Multiple Choice

Which of the following controls would be most effective in assuring the proper custody of investment securities?

• A) Direct access to securities in the safety deposit box is limited to only one corporate office.
• B) Personnel who post investment security transactions in the general ledger master file are prohibited from updating the investment securities master files
• C) The purchase and sale of investment securities are executed upon the specific authorization of the board of directors.
• D) The balances in the investment security master file are periodically compared with the physical investment securities by independent personnel.

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Definitions:

Cashier's Checks

A check issued by a bank, drawn on its own funds rather than on one of its depositor's accounts, ensuring the availability of funds for the payee.

Certified Checks

Checks guaranteed by a bank, indicating that the signer had enough funds in their account to cover the amount at the time of certification.

Internal Control Policies

Procedures and protocols implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.