Which of the Following Factors Would Most Likely Be Considered

question 63

Multiple Choice

Which of the following factors would most likely be considered an inherent limitation to an entity's internal control?

• A)The complexity of the information processing system.
• B)Human judgment in the decision making process.
• C)The ineffectiveness of the board of directors.
• D)The lack of management incentives to improve the control environment.

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction, notably in the United States.

Net Assets

The difference between total assets and total liabilities, representing the residual interest in the assets of an entity after deducting liabilities.

Unrecognized Prior Service Cost

Refers to costs from past services not yet recognized in financial statements for pension plans.

Accrued/Prepaid Pension Cost

Expenses related to pension plans that have been incurred but not yet paid, or paid in advance of the period to which they apply.