A Properly Designed Internal Control System

question 9

Multiple Choice

A properly designed internal control system:

• A) Requires the use of non-computerized systems.
• B) Lowers the company's risk of loss.
• C) Eliminates the need for an audit.
• D) Insures profitable operations.
• E) Is not necessary if the company uses a computerized system.

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Definitions:

English Auction

A type of auction in which the price ascends and participants bid openly against one another, with the item going to the highest bidder.

Rational Self-Interest

An economic theory that suggests individuals make decisions based on the best outcome for themselves, taking into account the costs and benefits of each option.

Values

Representations of the importance, worth, or usefulness of something, often guiding decision-making and behavior.

Reservation Price

The highest amount a customer is prepared to spend on a product or service.