Question

Explain why separation of duties is important with cash? Assume you are manager of a convenient store. How many employees do you need to effectively have separation if duties? List the employees out and explain their responsibilities.

Answer 1

Separation of duties is important task while handling cash, it’s a method of internal control on cash handling, since cash is a high risk assets that have risk of theft, embezzlement, misuse so there should always be separation of duties for handling cash.

I need at least two employees for handling cash one for cash receiving and other for checking the cash handlers and depositing of cash and safe custody of cash.

Roles of first employee: Cash and check receipt, documentation of cash records and keeping the cash in safe place.

Roles of second employee: opening of mails and check processing, verifying that all the check received are deposited and accounted correctly, managing the second keys of safe to mitigate the risk of theft.