Which of the following is NOT a proper segregation of duties for cash received in person?

• A. The same employee both receives cash and records it in the accounting system.
• B. Cash receipts are deposited by someone other than the person who records them.
• C. The employee who receives cash does not have access to the accounting records.
• D. One employee receives cash while another records the transaction.

Answer: (A)

Verified step by step guidance

1. Understand the concept of segregation of duties: Segregation of duties is a key internal control principle that ensures no single individual has control over all aspects of a financial transaction. This reduces the risk of errors and fraud.
2. Analyze the options provided: Review each option to determine whether it adheres to the principle of segregation of duties. Look for any overlap in responsibilities that could compromise internal controls.
3. Evaluate the first option: 'The same employee both receives cash and records it in the accounting system.' This violates segregation of duties because one person is handling both the receipt and recording of cash, which increases the risk of fraud or error.
4. Assess the second option: 'Cash receipts are deposited by someone other than the person who records them.' This adheres to segregation of duties because the responsibilities are divided between two individuals.
5. Review the remaining options: 'The employee who receives cash does not have access to the accounting records' and 'One employee receives cash while another records the transaction.' Both of these options align with proper segregation of duties, as they separate the tasks of receiving and recording cash.