Asked by Visionary April on May 08, 2024
Verified
The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.
Physical Custody
The actual possession or direct control of tangible assets, documents, or securities.
Asset Records
Documentation that details the acquisition, valuation, and disposal of assets owned by an individual or organization.
- Recognize the importance of segregation of duties and its impact on preventing fraud and errors in financial statements.
Verified Answer
NY
Natalie YazzieMay 14, 2024
Final Answer :
True
Explanation :
Separating the responsibility for record-keeping and physical custody helps reduce the risk of fraud, errors, and mismanagement. It ensures that there is a system of checks and balances in place, and provides greater accountability and transparency.
Learning Objectives
- Recognize the importance of segregation of duties and its impact on preventing fraud and errors in financial statements.
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