The Preventative Controls Within a Company's Internal Control System

question 28

Multiple Choice

The preventative controls within a company's internal control system:

• A)Form the foundation for all of a company's other internal control components
• B)Focus on management's philosophy and operating style
• C)Ignore the risk factor associated with a company's control procedures
• D)Relate to safeguarding a company's assets and checking the accuracy and reliability of the company's accounting data

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Definitions:

AGI

The total income earned by an individual, subtracting specific deductions, used to calculate how much income tax is owed.

Deductible Contribution

An investment into a qualified account, such as an IRA or 401(k), that can be subtracted from gross income to reduce taxable income.

Highly Compensated Employees

Employees who receive compensation above a specific threshold set by the IRS, subject to certain retirement plan rules.

Pension Plan

A savings strategy for retirement that mandates employers contribute to a fund reserved for an employee's future benefits.