ITPEC IP April 2024 Question 64
ITPEC IP April 2024 — Question 64 of 100
Segregation of duties assigns incompatible parts of a process to different people so they check one another. For example, the person who authorizes a payment should differ from the person who records it and the person who handles the asset. Requiring collusion for abuse and enabling independent detection reduce the risk of both fraud and accidental error.
Answer (b)
Why not others:
- (a) Delegation of authority passes decision rights to another level or person but does not necessarily separate incompatible tasks
- (c) Monitoring observes whether controls and operations work as intended
- (d) Diversification of risk spreads exposure across different assets or activities
Key rule: No one person should control authorization, custody, recording, and review of the same transaction from beginning to end.
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