Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

What is the primary purpose of separation of duties in an organization?

To allow employees to specialize in one task only

To increase the speed of processing financial transactions

To minimize the need for employee training

To reduce the risk of fraud by ensuring no single individual controls all aspects of a financial transaction

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Verified step by step guidance

Understand the concept of separation of duties: Separation of duties is a fundamental internal control mechanism in financial accounting and organizational management. It involves dividing responsibilities among different individuals to ensure that no single person has control over all aspects of a financial transaction.

Identify the primary purpose: The main goal of separation of duties is to reduce the risk of fraud and errors. By splitting tasks, it becomes harder for any individual to manipulate financial records or commit fraudulent activities without detection.

Analyze the incorrect options: The other choices provided in the problem (specialization, speed of processing, and minimizing training needs) are not the primary purpose of separation of duties. While these may be secondary benefits, they do not address the core reason for implementing this control.

Relate separation of duties to fraud prevention: When duties are separated, it creates a system of checks and balances. For example, one employee might handle cash receipts, another records transactions, and a third reconciles the accounts. This division ensures accountability and transparency.

Conclude with the correct answer: The correct answer is 'To reduce the risk of fraud by ensuring no single individual controls all aspects of a financial transaction,' as this aligns with the primary purpose of separation of duties in an organization.