What Is the Primary Benefit of Effective Internal Control in an Organization

question 11

Multiple Choice

What is the primary benefit of effective internal control in an organization?

• A) Achievement of certain organizational goals.
• B) Completion of a successful audit for the entity.
• C) Shareholder involvement in the company's success.
• D) Obtaining profitability and financial strength.

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Definitions:

Sensitivity Analysis

A technique in financial modeling used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Variable Costs

Costs that vary directly with the level of production or volume of sales, such as materials and labor.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums, providing stability to a company's expense structure.

Depreciation Expense

The allocated amount of the cost of an asset that is written off as an expense over its useful life.