Which two job functions should be segregated to ensure proper internal controls within an organization?

• A. Hiring and training
• B. Budgeting and forecasting
• C. Authorization and recordkeeping
• D. Marketing and sales

Answer: (C)

Verified step by step guidance

1. Understand the concept of segregation of duties: Segregation of duties is a fundamental principle in internal controls that ensures no single individual has control over all aspects of a financial transaction. This reduces the risk of errors and fraud.
2. Identify the key functions in financial processes: Authorization involves approving transactions or activities, while recordkeeping involves documenting and maintaining records of those transactions.
3. Analyze why these functions should be segregated: Combining authorization and recordkeeping allows one person to both approve and manipulate records, which increases the risk of fraud or errors going undetected.
4. Compare other job functions mentioned in the problem: Hiring and training, budgeting and forecasting, and marketing and sales are important functions but do not directly relate to financial transaction controls in the same way as authorization and recordkeeping.
5. Conclude that segregation of authorization and recordkeeping is essential for proper internal controls, as it ensures checks and balances in financial processes.