An Effective Internal Control Requires Organisational Independence of Departments

question 63

Multiple Choice

An effective internal control requires organisational independence of departments. Organisational independence would be impaired in which of the following situations?

• A) The internal auditors report to the audit committee of the board of directors.
• B) The financial controller reports to the marketing director.
• C) The payroll accounting department reports to the chief accountant.
• D) The cashier reports to the treasurer.

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Definitions:

Reflex Action

An involuntary and immediate response to a stimulus without conscious thought.

Central Switching

Management and direction of data traffic in a network by a device or software that determines the optimal path for data to be forwarded to its destination.

Complex Nervous Systems

Intricate networks of neurons and synapses within organisms that process sensory input, regulate bodily functions, and guide behavior.

Animal Spirits

A term used to describe the instinctive or emotional aspects of human behavior, often used in economic contexts to explain fluctuations in consumer confidence and decision-making.