Allowing only certain employees to order goods and services on behalf of the company is an example of what internal control activity?
A)segregation of duties
B)safeguarding of assets and records
C)checks on recorded amounts
D)clearly defined authority and responsibility

Question

Quizplus · Accepted Answer

Clearly defined authority and responsibility involves specifying who is authorized to perform certain tasks and make decisions, which helps to prevent errors, fraud, and other problems. Limiting the ability to order goods and services to designated employees is an example of this type of internal control activity. Segregation of duties involves separating certain key duties to prevent fraud or errors, safeguarding of assets and records involves protecting important company resources, and checks on recorded amounts involve verifying that financial information has been accurately recorded. While all of these control activities are important, the specific issue of limiting purchasing authority relates most directly to clearly defined authority and responsibility.

Allowing Only Certain Employees to Order Goods and Services on Behalf