ITPEC IP April 2021 Question 63
ITPEC IP April 2021 — Question 63 of 100
Segregation of duties divides incompatible responsibilities among employees so they check and restrain one another. Separating authorization, execution, recording, and asset custody reduces the opportunity for one person to commit and conceal misconduct or an error.
Answer (b)
Why not others:
- delegation of authority assigns decision rights but does not necessarily separate incompatible work
- monitoring observes performance and control effectiveness
- risk diversification spreads exposure across different assets or activities
Key rule: Internal control separates duties whose combination would let one individual both perform and hide an improper action.
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