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:

Compounded Monthly

Interest calculation method where interest is added to the principal balance monthly, affecting future interest accrual.

Payment Stream

A series of two or more payments required by a single transaction or contract.

Obligation

A legal or moral duty to do something or pay something, often within the context of contracts and agreements.

Compounded Semi-Annually

Involves calculating the addition of interest to the principal sum of a loan or deposit on a half-yearly basis, incrementally increasing the amount earned or owed.