The purpose of segregating the duties of distributing payroll checks and hiring personnel is to:
A)Separate the custody of assets from the accounting for those assets.
B)Establish clear lines of authority and responsibility.
C)Separate duties within the accounting function.
D)Separate the authorization of transactions from the custody of related assets.

Question

Quizplus · Accepted Answer

Segregating the duties of distributing payroll checks and hiring personnel helps to separate the authorization of transactions (hiring employees) from the custody of related assets (payroll checks). This helps to prevent or detect errors or fraud, as different individuals are responsible for different aspects of the process. Choice A is incorrect, as the segregation of duties in this case is not specifically related to the custody of assets. Choice B is not incorrect, as separating duties can establish clear lines of authority and responsibility, but this is not the main purpose in this scenario. Choice C is also incorrect, as the duties being segregated are not solely within the accounting function.

The Purpose of Segregating the Duties of Distributing Payroll Checks