Separation of duties can promote strong internal control in the conversion process.Which three duties should be separated?
A)Physical custody, authorization and recordkeeping
B)Direct material, labor and overhead processing
C)Assets, liabilities and equity
D)Job order, process and hybrid

Question

Quizplus · Accepted Answer

Separation of duties in the conversion process should involve physical custody, authorization, and recordkeeping. This means the person who has physical access to the assets should be different from the one who authorizes the transaction and the recording of the transaction. By separating these duties, it is harder for fraudulent activities to occur as it requires collusion between multiple individuals. The other options listed are not relevant to the conversion process.

Separation of Duties Can Promote Strong Internal Control in the Conversion