Regarding Internal Control Systems

question 124

Multiple Choice

Regarding internal control systems:

• A) ultimate ownership of the system should rest with the board of directors.
• B) a properly implemented system can be expected to provide 100 percent assurance that the organization will meet its objectives.
• C) both a. and b.
• D) neither a. not b.

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Definitions:

Residual Income

The income that an entity generates after accounting for all operational and capital expenses, often used to assess the profitability of investment centers within a business.

Return on Investment

A measure of the profitability of an investment, calculated as the ratio of net profits to the initial cost of the investment.

Investment Decisions

The process of making choices about where to allocate resources and capital in order to achieve the highest returns.

Multidimensional Performance

An approach to performance measurement that considers various aspects such as financial, operational, and people metrics to assess the overall effectiveness and efficiency.