What is a benefit of having a clear segregation of duties in financial transactions?

A clear segregation of duties in financial transactions primarily helps in minimizing the risk of fraud. This principle involves dividing responsibilities among multiple individuals in such a way that no single person has control over all aspects of any financial transaction. By implementing this separation, the organization creates a system of checks and balances. This means that the actions of one person can be reviewed or counter-checked by another, making it significantly more difficult for fraudulent activities to occur without detection.

When one individual is responsible for both initiating and approving a transaction, they could potentially manipulate the process for personal gain. However, when different individuals handle these responsibilities, they must cooperate, thereby increasing the likelihood that any irregularities will be caught. This structure not only protects the organization's assets but also builds trust among stakeholders, as there are clear accountability measures in place.

The other choices, while potentially beneficial in some contexts, do not directly address the primary advantage of segregating duties. Increased efficiency and reduced operational costs may sometimes be outcomes of streamlined processes, but these are not the primary goals of segregation of duties. Enhanced employee morale can result from various factors within a workplace environment but is less directly tied to the segregation of duties compared to the critical risk management function it serves.