A good system of internal control requires that the physical custody of assets be separated from the accounting for those assets. This concept is known as safeguarding assets and records. A. True B. False

Question

Business

Maddox Barber

26 February, 09:44

A good system of internal control requires that the physical custody of assets be separated from the accounting for those assets. This concept is known as safeguarding assets and records. A. True B. False

+5

Answers (1)

Know the Answer?

Brodie Hart · Answer 1

B) false

Explanation:

In order to be able to detect possible fraud or deter fraud from occurring, record keeping and physical custody of assets must be carried out by different people. For example, the person that processes payment orders cannot be the same person that signs the checks. It should take more than one person to complete a task involving asset transactions.

This concept is known as segregation of duties.