The Stuart office finds this control weakness: the one employee receives checks and posts receipts. Which administrative correction best reduces risk?
Correct Answer
B) deposit custody separation
Separating authorization, custody, and recording duties reduces payment and cash-handling risk.
Why This Is the Correct Answer
Separating authorization, custody, and recording duties reduces payment and cash-handling risk.
Why the Other Options Are Wrong
Option A: bid file closeout memo
bid file closeout memo puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Option C: retainage schedule update
retainage schedule update puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Option D: vendor record deletion
vendor record deletion puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Memory Technique
An unlabeled Owner Reviews dollar tells the wrong story.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Business Administration, Segregation of Duties; verify the record, approval, or control duty before selecting the answer.
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