Why Is It Important to Obtain an Understanding of the Internal

question 36

Multiple Choice

Why is it important to obtain an understanding of the internal control system?

• A) weak internal controls may increase the risk of material misstatement.
• B) to determine the level of inherent risk.
• C) because strong internal controls indicate management integrity.
• D) all of the above

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Definitions:

Organizational Events

Occurrences within an organization that have the potential to affect its operations, culture, or stakeholders, ranging from internal meetings to external changes in the business environment.

OB

Organizational Behavior; the study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself.

Organizational Behavior

A field of study that investigates the impact that individuals, groups, and structures have on behavior within organizations, aiming to improve organizational effectiveness.

Telecommuting

The practice of working from a remote location, often home, instead of commuting to an office, utilizing digital communication tools.