Which One of the Following Represents a Control Deficiency

question 53

Multiple Choice

Which one of the following represents a control deficiency?

• A)A missing control that is required for achievement of objectives.
• B)A control that operates as designed.
• C)A control that ensures the reliability of financial reporting.
• D)A control that does not prevent immaterial errors.

Recognize the importance of estimating cash flows accurately in project valuation.

Assess investment projects using different criteria and understand their applicability.

Differentiate between mutually exclusive and independent projects and the decision rules for each.

Calculate the profitability index and interpret its meaning in investment decision-making.

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Definitions:

Budget-gaming Problem

A situation in which managers manipulate financial allocations for personal advantage or to meet shortsighted objectives.

Compensation Scheme

a structured plan designed by organizations to determine and provide salaries, bonuses, benefits, and incentives to employees.

Target Based Pay

Target based pay is a compensation strategy that ties an employee's earnings directly to the achievement of specific performance targets.

Straight Line Pay

A compensation method where employees are paid a fixed salary or wage, without variations for overtime or performance.