Which control is associated with concentration accounts?

Which control is associated with concentration accounts?

• A. Prohibiting direct customer access to concentration accounts.
• B. Capturing customer transactions in the customer statements.
• C. Requiring dual signatures on general ledger tickets.
• D. Identifying and monitoring recurring customer names.

Answer: (C)

Concentration accounts pool funds from multiple customers, creating higher risk if a single person can authorize moves or postings. The strongest control here is requiring dual signatures on general ledger tickets. This provides two independent approvals before any transfer or adjustment from the concentration account, enforcing segregation of duties and creating a clear audit trail. It helps prevent unauthorized disbursements and makes it harder for one person to commit fraud, which is essential when funds are centralized for many clients. The other options describe useful practices—keeping customers from direct access, recording transactions in statements, or monitoring recurring names—but they don’t specifically address the heightened need for independent authorization and accountability tied to concentration accounts.

Concentration accounts pool funds from multiple customers, creating higher risk if a single person can authorize moves or postings. The strongest control here is requiring dual signatures on general ledger tickets. This provides two independent approvals before any transfer or adjustment from the concentration account, enforcing segregation of duties and creating a clear audit trail. It helps prevent unauthorized disbursements and makes it harder for one person to commit fraud, which is essential when funds are centralized for many clients.

The other options describe useful practices—keeping customers from direct access, recording transactions in statements, or monitoring recurring names—but they don’t specifically address the heightened need for independent authorization and accountability tied to concentration accounts.