Which of the Following Describes the Internal Control Component Risk

question 20

Multiple Choice

Which of the following describes the internal control component risk assessment?

• A)Risk assessment is designed to ensure that the business's goals are achieved.
• B)A company must identify its risks.
• C)Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
• D)Risk assessment is the 'tone at the top' of the business.

---

Definitions:

Economic Efficiency

A state where resources are allocated in the most effective way possible, maximizing output without wasting any inputs, ensuring that goods and services are produced at the lowest possible cost and distributed to those who value them most.

Deregulation

The process of removing or reducing government controls and restrictions in an industry to allow for more competition and efficiency.

Pork-Barrel Politics

The allocation of government spending for localized projects secured primarily to bring money to a representative's district, often without proper consideration of the benefits or costs.

Principal-Agent Problem

The principal-agent problem occurs when there is a conflict of interest between a principal (owner or shareholder) and an agent (manager or executive) due to differing goals, with the agent potentially making decisions that benefit themselves at the expense of the principal.