A Company's Internal Control System

question 181

Multiple Choice

A company's internal control system:

• A) Eliminates the company's risk of loss.
• B) Monitors company and employee performance.
• C) Eliminates human error.
• D) Eliminates the need for audits.
• E) Eliminates the need for managers' certification of controls.

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Definitions:

Bond Indenture

A legal document detailing the terms and conditions of a bond issue, including the interest rate, maturity date, and obligations of the issuer.

Legal Document

A formal document that records agreements, contracts, or declarations and is recognized and enforceable by law.

Face Value

The nominal value printed on a financial instrument like a bond or currency note, representing its legal value.

Issuer

An entity, such as a corporation or government, that develops and offers securities for sale to investors to raise capital.