Which of the Following Is a Characteristic of Effective Controls

question 42

Multiple Choice

Which of the following is a characteristic of effective controls?

• A) They should be acceptable to supervisors and employees.
• B) They should enable employees to correct their own mistakes.
• C) They should be established by middle managers and supervisors.
• D) They should not allow supervisors to ignore variance.

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Definitions:

Investor Ownership

The possession of equity in a company, represented by stocks, by investors.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without controlling or jointly controlling the entity.

Short-Term Investment

An investment expected to be converted into cash, sold, or exchanged within a short time frame, typically within a year.

Stock Investments

Financial assets consisting of shares in companies, representing ownership and possibly entitling the shareholder to dividends.