Indicate whether each of the following statements regarding internal controls is true or false.
a)________ Segregation of duties is an internal control feature that requires different individuals to perform the following functions: authorization, recording, and custody of assets.b)________ Under proper internal controls, the person who collects customer payments should also maintain the records of cash receipts.c)________ Under proper internal controls, those who are given authority should bear the corresponding responsibility.d)________ One of the basic rules of internal control is to require some employees to take regular vacations.e)________ A fidelity bond is a form of insurance that companies ask employees to buy to protect the company from loss due to employee dishonesty.

Question

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b)False c)True d)True e)F. Collecting customer payments and recording cash receipts should be performed by separate employees.c)This is true. Employees who are given authority should bear the corresponding responsibility.d)This is true. Requiring employee vacations helps to prevent employees from covering up fraudulent behavior.e)This is false. A company is protected financially from financial loss due to fraudulent behavior of bonded employees, but it is the company that purchases the fidelity bond, not the employee.

Indicate Whether Each of the Following Statements Regarding Internal Controls