Internal controls can prevent, detect or correct a problem.Which of the following groups includes controls that will fulfill all three with respect to the risk of an employee embezzling money by forging a manager's signature on a check?
A)Separation of duties, internal audit, employee bonding
B)Physical security of cash, pre-numbered documents, restrictive endorsements
C)Separation of duties, pre-numbered documents, restrictive endorsements
D)Physical security of cash, internal audit, employee bonding

Question

Quizplus · Accepted Answer

Separation of duties can prevent embezzlement by ensuring no single employee has control over all aspects of a financial transaction. Internal audits can detect embezzlement by reviewing financial records and transactions for irregularities. Employee bonding can correct a problem by providing financial compensation for losses due to embezzlement.

Internal Controls Can Prevent, Detect or Correct a Problem