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ZoeGu
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Joined: 06 Jul 2012
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Posts: 2

Posted: 19 Jul 2012 at 09:39 \| IP Logged

As you see the answer of the question is A,but I can't get it. I don't understand why the separation of two authorizations can be the effective control...

Which of the following control is most likely to prevent improper disposition of equipment?
A. A separation of duties between those authorized to dispose of equipment and those authorized to approve removal work order.

nambivar
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Regular

Joined: 14 Nov 2010
Location: United States
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Posts: 144

Posted: 19 Jul 2012 at 10:55 \| IP Logged

ZoeGu: Internal control is an important area in CPA Auditing exam; segregation of duties is an important area in that.
Simply stated, if the same person is a) authorized to do a transaction, b) make accounting entries for that transaction, and c) is allowed to hold custody of the relevant asset, anyone can see that such a person can commit a fraud. If different persons are in charge of each of these functions, then the chances for fraud are minimal (unless all these persons collude).
Hope this helps.
---
Passed all 4 papers in 2011

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