Texas Municipal Courts Education Center (TMCEC) Level 2 Practice Exam

Segregation of duties means dividing key steps of a process among multiple people so no single person controls all aspects. In cash handling, this would mean different individuals handle receiving cash, making deposits, and posting ledger entries. This separation creates checks and balances: if one person tries to skim cash or falsify records, another person or the reconciliation process is likely to catch the inconsistency. It also builds an accountability trail, since actions are performed by different staff and reviewed by others, making fraud or errors harder to conceal. Documentation, while important, is about keeping records of transactions rather than distributing responsibilities. Authorization focuses on who has the power to approve actions, not the broader control of ensuring no one person can complete the entire chain. Access controls limit who can perform certain tasks in systems or physically access assets, but segregation of duties specifically targets distributing duties to prevent fraud and errors by having multiple people involved in distinct steps.