Which of the Following Best Describes the Inherent Limitations That

question 50

Multiple Choice

Which of the following best describes the inherent limitations that should be recognized by an auditor when considering the potential effectiveness of an accounting system?

• A)Procedures whose effectiveness depends on segregation of duties can be circumvented by collusion.
• B)The competence and integrity of client personnel provides an environment conducive to accounting control and provides assurance that effective control will be achieved.
• C)Procedures designed to assure the execution and recording of transactions in accordance with proper authorizations are effective against irregularities perpetrated by management.
• D)The benefits expected to be derived from an effective accounting system usually do not exceed the costs of such control.

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Definitions:

Compromising

The process of making concessions or reaching agreements where both parties give up something to resolve a conflict.

Spanish Control

The period of history when Spain established dominance over many territories worldwide, notably in the Americas, through conquest and colonization.

Northern California

A geographical region in the U.S. state of California characterized by its diverse landscapes, including the San Francisco Bay Area, the Sierra Nevada mountains, and the Redwood forests.

Independence Movement

The collective efforts of a group or nation aimed at gaining political sovereignty and self-governance.