Answer (D) is correct . Combining the timekeeping function and the preparation of the payroll journal entries would not be improper because the employee has no access to assets or to employee records in the personnel department. Only through collusion could an embezzlement be perpetrated. Accordingly, the functions of authorization, recordkeeping, and custodianship remain separate.
Answer (A) is incorrect because Persons with recordkeeping but not custody of assets responsibilities should have access to blank checks, while the duty of signing checks (custodianship) should be assigned to persons (e.g., the treasurer) with no recordkeeping function.
Answer (B) is incorrect because Payroll preparation and payment to employees should be segregated since they are incompatible recordkeeping and custodianship functions.
Answer (C) is incorrect because Approval of time cards is an authorization function that is incompatible with the recordkeeping function of preparation of paychecks.
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