Is it a good practice for the person entering bills to also be the first to see the bank statements?

The rationale for selecting that response revolves around the principles of internal control and segregation of duties within financial operations. When the same individual is responsible for both entering bills and being first to review bank statements, it creates a risk of having unchecked authority over financial data. This can lead to potential mismanagement or even fraudulent activities, as the individual may manipulate records without oversight.

Segregation of duties is a primary control mechanism that helps to prevent errors and fraud by distributing responsibilities among different individuals. By ensuring that separate people handle transaction recording and statement reconciliation, organizations establish checks and balances that enhance financial integrity. This division becomes particularly important in larger or more complex organizations, where the volume of financial transactions increases the risk of oversight.

The other choices imply various scenarios, such as transparency or minimal transaction volumes, which do not adequately address the fundamental risks associated with allowing a single person to manage both entries and reviews of financial statements. This approach neglects the vital safeguards that internal controls provide to maintain the accuracy and reliability of financial reporting. In conclusion, maintaining a clear separation of duties is essential for effective financial management and safeguarding an organization’s assets.