Answer (B) is correct . One person should not be responsible for all phases of a transaction, i.e., for authorization of transactions, recording of transactions, and custodianship of the related assets. These duties should be performed by separate individuals to reduce the opportunities to allow any person to be in a position both to perpetrate and conceal errors or fraud in the normal course of his/her duties (AU 314).
Answer (A) is incorrect because Payment is a form of execution (operational responsibility).
Answer (C) is incorrect because Custody of assets and execution of related transactions are often not segregated.
Answer (D) is incorrect because Payments must be recorded when made.
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