Internal Controls in the Acquisition / Payment Process Should Address

question 24

Multiple Choice

Internal controls in the acquisition / payment process should address which of the following forms of risk?

• A)Liquidity risk
• B)Human error risk
• C)Both A and B
• D)Neither A nor B

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Definitions:

Instrumentality

A term referring to a means or agency through which a function of another entity is accomplished.

Business Transaction

An interaction between two or more parties that involves the exchange of goods, services, or information for the purpose of conducting business.

Legal Entity

An organization that has legal rights and obligations, including the ability to enter into contracts and sue or be sued.

Liability

Liability is a legal responsibility or obligation to compensate or make amends for a loss, damage, or other wrongful acts.