Question

Why is the separating of recordkeeping from the custody of assets a limitation of an internal control system?

Answer 1

The separating of recordkeeping from the custody of assets a limitation of an internal control system because:

• In example above, fraud could occur only if the two employees collude (agree to work together to commit fraud)
• Employee maintaining accounting records has no incentive to falsify records.
• Employee controlling asset will know if another person is maintaining records or not.
• The employee who controls/has access to an asset should not maintain that asset's accounting records.

What is meant by Internal Control?

• Internal controls are the mechanisms, rules, and procedures implemented by a corporation to ensure the integrity of financial and accounting information, promote accountability, and stop fraud.
• Internal controls can help improve operational efficiency by improving the accuracy and timeliness of financial reporting, besides complying with laws and regulations and preventing employees from stealing assets or committing fraud.

To learn more about asset's accounting records: brainly.com/question/24012821

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