Factors That Indicate the Need for Internal Controls Over Fixed

question 67

Multiple Choice

Factors that indicate the need for internal controls over fixed assets processes include all of the following, except:

• A)General nature of fixed assets makes the susceptible to theft because they are distributed throughout the business and are in the hands of many
• B)Large quantities of fixed assets
• C)High likelihood of obsolescence due to technological changes
• D)The high cost of assets

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Definitions:

Covariances

A measure indicating the extent to which two variables change together; if the variables tend to show similar behavior, the covariance is positive.

Security Returns

Represents the profit or loss generated on an investment over a particular period of time.

Economic Forces

Factors such as inflation, interest rates, economic growth, and policies that influence the operation of the economy and impact businesses and investments.

Index Model

A financial model that describes the market or a segment of the market, typically used to predict the return or price of assets in comparison to the market as a whole.