Proper segregation of duties requires that different people perform the functions of authorizing a transaction, recording the transaction which includes preparing source documents, keeping physical custody of the related asset, and periodic reconciliation of the physical assets to their recorded amounts. If a person who receives cash also prepares the deposit slip to deposit the cash in the company's account, that person is performing the custody function (receiving the cash) and the function of preparing the source document (the deposit slip) that will be used to record the transaction. It would be very easy for that person to pocket some of the cash. There is much more potential for fraud with cash than there is with checks. The person who receives the cash should not be the person who also prepares the deposit slip. A second person should be involved.
This is an appropriate segregation of duties. Proper segregation of duties requires that different people perform the functions of authorizing a transaction, recording the transaction which includes preparing source documents, keeping physical custody of the related asset, and periodic reconciliation of the physical assets to their recorded amounts. The mail clerk is performing the custody function (receiving the payment), and Accounts Receivable is performing the recording function (posting to the subsidiary ledger).
This is an appropriate segregation of duties. Proper segregation of duties requires that different people perform the functions of authorizing a transaction, recording the transaction which includes preparing source documents, keeping physical custody of the related asset, and periodic reconciliation of the physical assets to their recorded amounts. The General Ledger clerk is performing the reconciliation function (comparing the summary journal entry from the Cashier with the batch total for posting to the subsidiary ledger); the Cashier is performing the custody function (receiving the cash); and the Accounts Receivable clerk is performing the recording function (posting to the Subsidiary Ledger).
This is an appropriate segregation of duties. Proper segregation of duties requires that different people perform the functions of authorizing a transaction, recording the transaction which includes preparing source documents, keeping physical custody of the related asset, and periodic reconciliation of the physical assets to their recorded amounts. The mail clerk is performing the custody function (receiving the payment), and the Cashier is performing the recording function (preparation of the deposit slip which will be the source document for recording the transaction).
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