Which of the Following Statements Concerning Internal Controls Is True

question 44

Multiple Choice

Which of the following statements concerning internal controls is true?

• A)Internal administrative controls are designed to limit the amount of funds spent on investments.
• B)Strong internal controls provide reasonable assurance that the objectives of a company will be accomplished.
• C)Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement.
• D)The control procedure,segregation of duties,prohibits the employment of a husband and wife or other closely related parties within the same company.

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Definitions:

Plausibility

The quality of seeming reasonable or probable.

Fiduciary Relationship

A legal and ethical relationship of trust between two or more parties, typically involving a caretaker and a beneficiary.

Expert

Refers to someone who is both experienced and learned in a given subject matter area or professional practice field.

Client

An individual or organization that engages the professional services or advice of another.