Which of the Following Statements Would You Expect to Read

question 6

Multiple Choice

Which of the following statements would you expect to read in a company memo arguing against the use of the systems development life cycle as a form of internal control?

• A)The risks associated with the SDLC are unknown.
• B)The SDLC does not help achieve all four objectives of internal control.
• C)The SDLC is not recognized by COSO.
• D)The SDLC has no relationship to internal control.

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Definitions:

Working Capital

Current assets minus current liabilities; a measure of a company's liquidity, operational efficiency, and short-term financial health.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials held by a company intended for sale in the ordinary course of business.

Incremental Cash Flows

The additional cash inflows or outflows expected from a new project or investment, crucial for determining its net present value.