Which of the following would offer the best protection for a company that wishes to prevent a reoccurrence of a previously detected "lapping" problem with trade accounts receivable?
A) Separate duties so that the bookkeeper in charge of the general ledger has no access to incoming mail.
B) Separate duties so that no employee has access to both checks from customers and currency from daily cash receipts.
C) Have a mandatory vacation policy for employees who both handle cash and enter cash receipts into the system.
D) Request that customer's payment checks be made payable to the company and addressed to the treasurer.

Question

Quizplus · Accepted Answer

Option C involves rotating employees who handle cash and cash receipts, preventing any one employee from being in a position to commit fraud for an extended period of time. This offers the best protection against "lapping" by ensuring that different employees are handling cash and entering cash receipts into the system, and also creates an atmosphere of accountability. Options A, B, and D do not directly address the problem of "lapping" and may not necessarily prevent fraud.

Which of the Following Would Offer the Best Protection for a Company