Which of the Following Most Likely Would Not Be Considered

question 16

Multiple Choice

Which of the following most likely would not be considered an inherent limitation of the potential effectiveness of an entity's internal controls?

• A)Incompatible duties.
• B)Management override.
• C)Mistakes in judgment.
• D)Collusion among employees.

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Definitions:

Fair Value Accounting

An accounting approach where companies measure and report the value of certain assets and liabilities on a fair value basis.

Net New Borrowing

The difference between the new debt taken on and debt that is repaid during a given period, reflecting a company's or government’s net financing activity.

Statement of Comprehensive Income

A financial statement that shows all changes in equity during a period except those resulting from investments by and distributions to owners.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial position.