When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

Question

Business

Natalia Holder

2 May, 09:38

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

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Answers (2)

Know the Answer?

Zamora · Answer 1

A. Segregation of duties

Explanation:

Segregation of duties is a form of internal control procedure. It involves the process of having more than one person to complete a given task. When more than one person is given a task, it is done with the intention of preventing fraud and error by having multiple people do it. It ensures that atleast two individuals are responsible for two different parts in a given task. It is sometimes referred to as Separation of duties. Separation of duties aims to avoid negligence and misconduct. In this case, if atleast 2 people were responsible for the bookkeeper job, it becomes harder for the bookkeeper to embezzle money the way he did.

Wesley Hensley · Answer 2

a.

Explanation:

Based on the scenario being described it can be said that the control procedure that would most likely prevent would be segregation of duties. This concept refers to having more than one individual to perform a single task. This prevents fraud and error in the process by having various individuals who are supervising the entire process and making sure that everything is done by the book.