Angelique is asked to help design controls to mitigate the potential of management at Zion attempting to improperly capitalize expenses. Which of the following controls could Angelique recommend for Zion?
A) Implementing segregation of duties in the general ledger system
B) Using data analytics to identify significant capitalization and reviewing for appropriateness
C) Requiring appropriate approvals in the general ledger system
D) All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Each of the options provided contributes to mitigating the risk of improper capitalization of expenses. Implementing segregation of duties ensures that no single individual has control over all aspects of a financial transaction, reducing the risk of errors or fraud. Using data analytics helps in identifying unusual or significant capitalization transactions that may require further review. Requiring appropriate approvals ensures that expenditures are reviewed and authorized by the appropriate level of management before being capitalized, adding another layer of oversight. Collectively, these controls create a comprehensive approach to mitigating the risk of improper capitalization.

Angelique Is Asked to Help Design Controls to Mitigate the Potential