Which of the following statements is correct with respect to

Which of the following statements is correct with respect to effective internal control?

1)Employees who authorize transactions should not be in a position to record those transactions.

2)For efficiency, the entity’s systems analyst(s) should be responsible for the day-to-day processing of data.

3)Employees who open mail containing payments from customers should immediately record those payments in the cash receipts journal.

4)Employees in the inventory warehouse should be responsible for authorizing the purchase of inventory.

5)All of the above.

Solution

Answer is 1. Employees who authorize transactions should not be in a position to record those transactions.

Explanation:

The main concept of internal control lies in the fact that each transaction must go from the hands of at least two different persons so that the wrong committed by any of the people can be traced by another person.