Question

explain why separation of duties is often described as the cornerstone of internal control for safeguarding assets. describe what can happen if the same person has cus

separation of duties is essential for safeguarding assets. the person who has custody of an asset should not also account for the asset

with both duties, the person can

confirm that the accounting records agree to the actual assets on hand

confirm that the employees are not stealing the assets

steal the asset and hide the theft by making a false entry in the accounting records

Explanation:

Separation of duties is a key internal - control principle. When one person has both custody and accounting for an asset, there is no check - and - balance. If a person has custody (physical control) and also accounts for the asset (records related to it), they can manipulate the records to cover up theft. For example, if an employee has access to cash (custody) and also records cash transactions (accounting), they could steal cash and then falsify the accounting records to make it seem like the cash is still there.

Answer:

steal the asset and hide the theft by making a false entry in the accounting records