A Company Should Study Risks Common to Its System Prior

question 32

Multiple Choice

A company should study risks common to its system prior to deciding the mix of controls needed.High-risk characteristics that might justify the need for extensive internal controls include all of the following, except:

• A)Goods received are especially difficult to differentiate, count, or inspect.
• B)High volumes of goods are often received, or the goods are of high value.
• C)Receiving and/or record keeping are performed at one centralized location.
• D)Changes in price or vendors are frequent.

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Definitions:

Break-Even Point

The level of sales at which total revenues equal total expenses, resulting in no profit or loss for the business.