Internal Controls Are Important Because They

question 43

Multiple Choice

Internal controls are important because they

• A)prevent fraud and misleading financial statements.
• B)eliminate fraud.
• C)deter fraud and prevent theft and other abuses.
• D)guarantee accurate financial statements.

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Definitions:

Instrument

An instrument is a formal legal document, such as a contract, will, or security, that gives evidence or details of a transaction or legal act.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money to the bearer on demand or at a set time.

Substitute

An alternative option or something that replaces another.

Cash

Physical form of currency, such as coins and banknotes, used to conduct transactions or stored as a financial asset.