Separation of duties refers to separating all of these functions except which of the following?

- Maintaining custody of assets

- Keeping accounting records

- Hiring personnel

- Authorizing transactions

The correct answer is - Hiring personnel.

Explanation:

Segregation of duties is a method that organizations use to separate the responsibilities of the various activities involved in the preparation of financial statements, including authorization and registration of transactions as well as maintaining custody of assets. Segregation of duties also represents a key control activity that affects all assertions in the financial statements. As a result, a segregation of functions or inappropriate may represent an important aspect for organizations causing material weaknesses or significant deficiencies in internal controls. This is because such deficiencies can result in a greater possibility of fraud, errors, or irregularities in the processes, in the processing of transactions and in financial reports.

An adequate segregation of functions reduces the probability that errors, whether intentional or involuntary, are not detected. It can also provide assistance in protecting the assets of the organization.

What is denoted in the response options is that the only one that does not deal with the same area is the third. All other functions are related to the accounting operations register, so it is understood that they are tasks that belong to the same process and can be disaggregated to optimize the processes within the organization.