>> Accounting Basics
"Expenditure Cycle" Please respond to the following:
Using your own present or previous place of work as an example, propose a method for mitigating the problem of separate departments (e.g., academics, student services, information technology, etc.) ordering the same item.
From the proposal above, discuss the possible issues that implementing the proposed method would cause to the organization. Suggest additional controls that you would put into place to overcome the issues. Provide specific examples to support your response.
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Separation of duties is a classic method to manage conflict of interestand fraud. It restricts the amount of power held by anyone individual. It putsobstruction in place to prevent fraud that may be perpetrated by an individual. Fraud will still occur if there is collusion. To be certain that you have identified all separation of duties issues, you will first need to create an information flow diagram for every function within each area of the organization. For instance, positions that handle valuable items, require a number of controls. Management may decide to accept, reject, or divert the risk instead of controlling risk through separation of duties. Once this is decided, management may determine where separation of duties will be applied.