Two clerks sharing the same cash register is a violation of which internal control principle?

• A. Segregation of duties
• B. Establishment of responsibility
• C. Physical controls
• D. Independent internal verification

Answer: (A)

Verified step by step guidance

1. Understand the concept of internal control principles: Internal controls are processes and procedures implemented by a company to safeguard assets, ensure accurate financial reporting, and promote operational efficiency.
2. Review the principle of 'Segregation of Duties': This principle ensures that no single individual has control over all aspects of a financial transaction. It reduces the risk of errors and fraud by dividing responsibilities among multiple individuals.
3. Analyze the principle of 'Establishment of Responsibility': This principle assigns specific tasks to specific individuals, ensuring accountability and clarity in roles.
4. Consider the principle of 'Physical Controls': These are measures taken to safeguard assets, such as locks, security cameras, and restricted access to sensitive areas.
5. Evaluate the principle of 'Independent Internal Verification': This involves regular reviews and audits of financial transactions and records by individuals not directly involved in the process to ensure accuracy and compliance.