QQuestionAnatomy and Physiology
QuestionAnatomy and Physiology
The principles of internal control include:
Multiple Choice
- ☐ Require automated sales systems.
- ☐ Separate recordkeeping from custody of assets.
- ☐ Bond all employees.
- ☐ Use only computerized systems.
- ☐ Maintain minimal records.
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Answer
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Step 1: Identify the principle of internal control from the given options.
The principle of internal control that is described in the option "Separate recordkeeping from custody of assets" is a fundamental concept in maintaining the integrity of financial records and operations. This principle ensures that the person responsible for maintaining financial records is different from the person who has control over the associated assets. This separation helps prevent errors and fraud.
Step 2: Analyze the importance of the principle.
This principle is crucial in preventing various types of fraud, such as embezzlement, because it creates a system of checks and balances. When recordkeeping is separated from custody of assets, it becomes more difficult for an individual to misappropriate assets without being detected. The person responsible for maintaining financial records can independently verify the accuracy of transactions and asset records, reducing the risk of errors or fraud.
Final Answer
The principle of internal control that is described in the option "Separate recordkeeping from custody of assets" is a fundamental concept that ensures the integrity of financial records and operations. This principle helps prevent errors and fraud by creating a system of checks and balances, making it difficult for an individual to misappropriate assets without being detected.
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