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Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization?

a. Disclosing lack of segregation of duties to the external auditors during the annual review. b. Replacing personnel every three or four years. c. Requiring accountants to pass a yearly background check. d. Allowing for greater management oversight of incompatible activities.

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Question added by Deleted user
Date Posted: 2013/08/25
Mohammed Salim Allana
by Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

The current scenario is dangerous and high risk of frauds,  mis appropriation and mis use of inherent powers.

 

To overcome such issues is (d) to let the Management is aware of this issue and to provide extra over sight in this area and then (b) Rotate the personnel every2-3 years to detect any fraud which may have occured in near past. 

Deleted user
by Deleted user

The best answer seems to be A, the worst is B.

Mohammad Al-Shayeb
by Mohammad Al-Shayeb , Finance Manager , Syriatel

Regardless of the circumstances for each case related to this risk (lack of adequate segregation of duties in a small organization), I believe that option A and option D on general could help to mitigate this risk.
However, I believe that there are other effective and efficient steps could also help in metigating this risk such as :
1- Use existing employees from other departments to do tasks that don't need for technical skills such as (data entries, Mail receipt and distribution, Payments and receipts).

2- Use existing employees from other departments to do some internal controls such as periodic and surprise cash & stock counts.

Abd ElRahman Mohammed Idris Mohammed
by Abd ElRahman Mohammed Idris Mohammed , Internal Audit Manager , Kenana Sugar Company Limited

(A) is correct

Deleted user
by Deleted user

Option a

Deleted user
by Deleted user

The external auditors should discover the lack of segregation of duties by themselves without the disclosure  by the client! ! I would rephrase option B to read : rotating instead of replacing! 

Razan ezaldeen Jararweh
by Razan ezaldeen Jararweh , محاسبه , العقرباوي مول

d

Musa Muhammad Dandikko
by Musa Muhammad Dandikko , Ag. Head of Procurement , Federal College of Education, Katsina

d. Allowing for greater management oversight of incompatible activities

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