In the Context of Internal Controls, Which Three of the Following

question 105

Multiple Choice

In the context of internal controls, which three of the following are true of a smaller entity? (choose three options)

• A)It has limitations surrounding its ability to put effective internal controls in place.
• B)The small number of its employees limits its ability to segregate duties.
• C)The risk of management override can be reduced by establishing documented policies and procedures.
• D)It is easier for smaller entities to have a paper trail of documentation supporting an assessment of internal controls.

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Definitions:

Sensitivity

The quality of being aware of and understanding the feelings and needs of others.

Clarity

The quality of being coherent and intelligible, ensuring ease of understanding.

Negative News

Information or reports that convey adverse or unwelcome developments, incidents, or outcomes.

Appropriate Channel

The most effective and suitable medium through which to send a message, depending on the context and audience.