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Segregation of Duties in a company with 11 employees

One of my former clients had 11 employees in total; President, Controller/Treasurer, VP of Claims, VP of Underwriting, Asst. Controller/Treasurer, AP clerk, AR clerk and then 4 office staff personnel. Do you think its possible for segregations of duties to exist when there are only 4 people in the Accounting/Finance department at this Company? Explain.

If yes, please discuss who would be responsible for doing bank reconciliations, cash receipts, actually depositing the cash at the bank, and cash disbursements for invoices due and who would be responsible for reviewing the work.

Solution Preview

The concept of segregation of duties is that a control policy should exist so that no one person should have responsibility over more than one related function. The four general categories of duties include authorization, custody, record keeping and reconciliation.

In the problem, there are enough employees in the company to design procedures for adequate internal control. Let's call the ...

Solution Summary

The 272 word cited solution lays out a system for preparing and reviewing various functions within the accounting department of a company. The solution explains how four people can easily accomplish the segregation of duties.

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