Economics · Internal Control and Auditing
Which of the following internal control activities is specifically designed to reduce the risk of a single person being in a position to both perpetrate and conceal errors or fraud in the normal course of their duties?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The consolidation of all financial reporting and asset custody functions into a single administrative department.
- 2The segregation of duties among different employees for the authorization, execution, and recording of transactions.✓
- 3The mandatory rotation of external auditing firms every three years to ensure independence.
- 4Allowing management to override established protocols for all urgent financial transactions.
Correct answer
The segregation of duties among different employees for the authorization, execution, and recording of transactions.
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