What Is the First Step in Establishing Formal Controls

question 6

Multiple Choice

What is the first step in establishing formal controls?

• A)Performance standards need to be established.
• B)Performance needs to be measured.
• C)Frequent contact between the home-country and regional offices needs to be established.
• D)Managers should be rotated to different assignments.

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Definitions:

Estimated Annual Net Income

The projection or forecast of a company's net income over a one-year period, considering all expected revenues and expenses.

Straight-Line Depreciation

A method of allocating the cost of a physical asset evenly over its useful life.

Average Rate of Return

The ratio of the average annual profit to the initial investment, expressed as a percentage, used to assess the profitability of an investment.

Estimated Annual Net Income

The projection of a company's net income over the course of a future year, based on current trends and expectations.