Which of the Following Is Not an Inherent Limitation of Internal

question 18

Multiple Choice

Which of the following is not an inherent limitation of internal controls?

• A) inappropriate assessment of the effectiveness of internal controls
• B) collusion by employees
• C) management overriding a control
• D) misunderstanding of instructions

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Definitions:

Self-Interest

Refers to actions that elicit personal benefit or advantage, often guiding economic decision-making and behavior in the context of rational choice theory.

Consumer Sovereignty

The determination by consumers of the types and quantities of goods and services that will be produced with the scarce resources of the economy; consumers’ direction of production through their dollar votes.

Dollar Votes

The “votes” that consumers cast for the production of preferred products when they purchase those products rather than the alternatives that were also available.

Goods and Services

The physical items (goods) and activities or benefits (services) that are produced or provided to meet the needs and wants of consumers.