Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?
A)Disclosing lack of segregation of duties to external auditors during the annual review.
B)Replacing personnel every three or four years.
C)Requiring accountants to pass a yearly background check.
D)Providing greater management oversight of incompatible activities.

Question

Quizplus · Accepted Answer

Providing greater management oversight of incompatible activities is the best way to compensate for the lack of adequate segregation of duties in a small organization. While all the options may have some limited impact on the issue, only D addresses the root cause of inadequate segregation of duties by ensuring that a higher level of management is supervising and reviewing activities to prevent fraud or errors. Disclosing the lack of segregation of duties to external auditors during the annual review may help identify any issues, but this does not provide a solution to the problem. Replacing personnel every three or four years is not practical nor effective in addressing the underlying issue of inadequate segregation of duties. Requiring accountants to pass a yearly background check may help identify any past issues but does not prevent future problems with inadequate segregation of duties.

Which of the Following Is the Best Way to Compensate