Which of These Is Not an Inherent Limitation of an Internal

question 6

Multiple Choice

Which of these is not an inherent limitation of an internal control structure?

• A)Collusion.
• B)Mistakes in judgement.
• C)Accounting override.
• D)Management override.

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Definitions:

Price-Earnings Ratio

A valuation metric comparing a company’s current share price to its per-share earnings, indicating the market's expectations of growth.

Earnings Per Share

A financial metric calculated by dividing the net earnings available to common shareholders by the average outstanding shares.

Closing Price

The final price at which a security is traded on a given trading day, often used for performance assessment.

Default Risk Premium

The additional return that an investor demands for taking on the risk that the borrower may default on the loan.