An Inherent Limitation of Internal Control Is That It ________

question 78

Multiple Choice

An inherent limitation of internal control is that it ________.

• A)is only as good as those that designed it
• B)often fails to provide complete assurance of misstatements
• C)can only provide an entity with reasonable assurance in achieving its financial reporting objectives
• D)may be costly to implement, and seldom yields any tangible benefits

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Definitions:

Opportunity Cost

The consequence in terms of lost benefits from not selecting the immediate next preferable option when making a choice.

Productivity

The measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

Terms of Trade

The ratio at which a country's exports are exchanged for imports, influencing the level of a country's economic health and prosperity.

World Price

The price at which a good is traded on the world market; determined by the world demand and world supply for the good.