Which of the Following Is Not a Limitation of the Internal

question 99

Multiple Choice

Which of the following is not a limitation of the internal control system?

• A)errors are made due to employee fatigue
• B)fraud occurs because of collusion between two employees
• C)the industry is inherently risky
• D)management instructs the bookkeeper to make fraudulent journal entries

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Definitions:

Monetary Items

Assets and liabilities that are to be received or paid in a fixed or determinable amount of money.

Functional Currency

The main currency used by a business or economy, reflecting the primary economic environment in which it operates.

Shareholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, representing ownership value in the company.

Presentation Currency

The currency in which the financial statements of an entity are presented.