In a good system of internal control, the person who initiates a transaction should be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records.

a) True

b) False

Question

Mateo Peck

Business

5 January, 03:29

In a good system of internal control, the person who initiates a transaction should be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records.

a) True

b) False

+5

Answers (1)

Know the Answer?

Aaden Montgomery · Answer 1

b) False

Explanation:

One of the key features of a good internal control system is the segregation of duties (SoD).

The principle of the segregation of duties entails that an individual is not allowed to initiate a transaction, review and approve the same transaction. In other words, a good internal control system would not allow an individual carry out all processes for a transaction from initiation, to authorization to approval to recording.

A system in which these responsibilities are shared mitigates against the risk of fraud and error.

Hence, in a good system of internal control, the person who initiates a transaction should be NOT be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records

In a good system of internal control, the person who initiates a transaction should be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records.a) Trueb) False

In a good system of internal control, the person who initiates a transaction should be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records.

a) True

b) False