In the finance and investment cycle,which of the following controls would be most effective in ensuring that proper custody of assets has been maintained?
A)Direct access to securities in the safety deposit box is limited to only one corporate officer.
B)Personnel who post investment transactions to the general ledger are not permitted to update the investment subsidiary ledger.
C)The purchase and sale of investments are executed on the specific authorization of the board of directors.
D)The recorded balances in the investment subsidiary ledger are periodically compared with the contents of the safety deposit box by independent personnel.

Question

Quizplus · Accepted Answer

The most effective control in ensuring proper custody of assets is to periodically compare the recorded balances in the investment subsidiary ledger with the contents of the safety deposit box by independent personnel. This helps to verify that the securities are held in custody and have not been misappropriated. Choice A limits access to the safety deposit box but does not provide independent verification of custody. Choice B separates duties but does not directly address custody. Choice C addresses proper authorization but does not directly address custody.

In the Finance and Investment Cycle,which of the Following Controls