hard20 pts · first answer countsinternal-controlssegregation-of-duties

A compensating control that falls short

In a small company, the accountant both records receipts and reconciles the bank. Management offers as a compensating control: "the MD looks at the closing bank balance each month". Why is this weak?

A.Compensating controls must always be automated to be effectiveB.The MD is not allowed to review bank balances under the Companies ActC.It is not precise enough to detect individual diverted receipts hidden in the balanceD.A monthly review is too frequent for a small company to sustain

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A compensating control that falls short

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