Which of the Following Statements Is Correct Regarding Internal Control

question 60

Multiple Choice

Which of the following statements is correct regarding internal control?

• A)A well-designed internal control environment ensures the achievement of an entity's control objectives.
• B)An inherent limitation to internal control is the fact that controls can be circumvented by management override.
• C)A well-designed and operated internal control environment should detect collusion perpetrated by two people.
• D)Internal control is a necessary business function and should be designed and operated to detect all errors and fraud.

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Definitions:

Raw Materials

Basic substance in its natural, modified, or semi-processed state, used as an input to a production process for subsequent modification or transformation into a finished good.

Suppliers

Entities that provide goods or services to another organization, playing a critical role in the supply chain.

Distributors

Companies or entities that are responsible for delivering products from manufacturers to the final consumers or retailers.

Organization Chart

A visual representation of the hierarchical structure of an organization, showing relationships and ranks of positions within it.