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Financial & Managerial Accounting
Found in: Page 305
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.

1. Separation of record keeping for assets from the custody over assets is intended to reduce theft and fraud.

Answer

  1. The statement is to be considered as true.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Meaning of Recordkeeping

Recordkeeping is the most common way of keeping exchanges and occasions in a bookkeeping framework. Since bookkeeping standards depend on accurate and exhaustive records, record keeping is the establishment of bookkeeping.

Step 2: Indicating true and false statements-

True

Separation of recordkeeping for assets from authority over assets in custody over assets diminishes theft and fraud, besides from a situation of collusion. Fraud and theft of assets can be handily executed and concealed when an individual combines the role.

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