According to COSO, an effective accounting system performs all of the following except
A) identifies and records all valid financial transactions
B) records financial transactions in the appropriate accounting period
C) separates the duties of data entry and report generation
D) records all financial transactions promptly

Question

Quizplus · Accepted Answer

Separating the duties of data entry and report generation is a control mechanism that helps prevent fraud or errors by ensuring that no one person has too much control over the full accounting process. However, this is not a functionality that is directly related to the effectiveness of an accounting system. The other options (A, B, and D) are all core components of an effective accounting system.

According to COSO, an Effective Accounting System Performs All of the Following