Question

Which of the following is a control problem related to segregation of duties? a. Bob order office supplies and deposits the company’s checks. b. Julie writes expense checks and Mark collects cash from customers. c. Steve records receivables and writes off bad debts. d. Rebecca records journal entries and orders lunch.

Answer 1

Answer:

c. Steve records receivables and writes off bad debts.

Explanation:

Segregation of duties is an internal control measure implemented by an organization to reduce the risk of fraud or error. It is the practice of separating duties to ensures mistakes, whether deliberate or not, do not happen without being detected by some else.  In the segregation of duties, one person does not control transactions from start to finish.

Steve's role is of receiving inventories, and writing off bad debts poses a risk to the business. The two transactions relate to debt management. There is a likelihood of Steve interfering with accounts to records them as bad debts, yet he has received payments