A Company May Be Limited in Their Internal Control Procedures

question 36

Multiple Choice

A company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:

• A)outweighs the benefits of the system.
• B)has nothing to do with the effectiveness of the internal control system.
• C)can prevent collusion.
• D)can limit employee distractions.

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Definitions:

State Unemployment

A government-provided insurance program that offers temporary financial assistance to workers who have lost their jobs.

SUTA

This stands for State Unemployment Tax Act, which is a payroll tax that employers must pay to the state to fund its unemployment benefits program.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Quick Ratio

A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.