Identify the principle of internal control that is violated in the following situation: Marvin Company is a very small business. Sam Jones, one of the two office clerks, opens the mail each day and removes the cash receipts that come in the mail. Sam then records the receipts in the cash records and the customer's account and deposits the cash in the bank.
A) Insure assets and bond key employee
B) Maintain adequate records
C) Divide responsibility for related transactions.
D) Perform regular and independent reviews

Question

Quizplus · Accepted Answer

Dividing responsibility for related transactions (also known as segregation of duties) is violated here because Sam Jones is responsible for opening mail, recording receipts, and depositing cash, which concentrates too much responsibility in one person's hands and increases the risk of errors or fraud.

Identify the Principle of Internal Control That Is Violated in the Following