Question

Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates Select one: a. Segregation of duties is violated b. Documentation procedures are violated c. Independent internal verification is violated d. Establishment of responsibility is violated e. None of the above

Answer 1

Answer:

a. Segregation of duties is violated

Explanation:

Internal controls refer to the plans, policies and procedures adopted by the management of an organization so as to ensure orderly and efficient operations.

Internal checks refer to arrangement of staff duties in such a manner so that no single individual can carry through a transaction and record all aspects of it.

Internal checks include the aspect of right segregation of duties so that transaction processing are allocated to different individuals such that no single individual exercises full control over a transaction and it's recording.

In the given case, Jolene is both warehouse custodian as well as responsible for accounting and recording inventory. This gives him full control of inventory flow of the business as well as it's recording. Such a position may be misused to manipulate records for personal gains.

Thus, the aspect of segregation of duties of internal check is violated here.