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:

Upward-Sloping

A scenario where higher levels of a certain variable lead to higher levels of another variable, typically seen in supply curves where higher prices lead to higher quantities supplied.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare, focusing on who ultimately bears the burden of the tax.

Externality Analysis

The study of costs or benefits that affect parties who did not choose to incur that cost or benefit, typically used in the context of environmental and public policy.

Public Interest Theory

A theory suggesting that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices.