Describe Each of the Three Broad Objectives Management Typically Has

question 56

Essay

Describe each of the three broad objectives management typically has for internal control. With which of these objectives is the auditor primarily concerned?

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Definitions:

Present Value

Today's value of future financial sums or cash flow streams, considering a specific rate of return.

Compound Interest

Interest computed on both the original amount of money and on the interest that it has already earned in past periods.

Earnings Rate

The rate at which a company generates income relative to assets, investments, or equity.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.