C is corrent because the treasurer has custodial functional responsibility. Thus, the treasurer should have responsibility for the custody of the bonds.
A is incorrect because the internal auditor should not be directly involved as such involvement would make an independent review of the structure impossible.
B is incorrect because the chief accountant, who is in charge of the recordkeeping function, should not also maintain custody of the bonds.
D is incorrect because the cashier function is more directly involved with details such as endorsing, depositing and maintaining records of cash receipts. The cashier should not maintain custody of the bonds.
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