Effective Internal Control in a Small Company That Has an Insufficient

question 40

Multiple Choice

Effective internal control in a small company that has an insufficient number of employees to permit proper division of responsibilities can best be enhanced by:

• A)employment of temporary personnel to aid in the separation of duties.
• B)direct participation by the owner of the business in the recordkeeping activities of the business.
• C)engaging a CPA to perform monthly bookkeeping.
• D)delegation of full, clear-cut responsibility to each employee for the functions assigned to each.

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Definitions:

Investment Analysis

The process of evaluating investment opportunities to determine their potential financial returns and associated risks.

Employee Morale

The overall outlook, attitude, satisfaction, and confidence that employees feel at work.

Qualitative Characteristic

A feature inherent in financial information that makes it useful to users, such as relevance or reliability.

Investment Analysis

The process of evaluating an investment for profitability and risk, thereby enabling the investor to make informed decisions.