To Place Appropriate Controls on Agents,stockholders with a Large Stake

question 91

True/False

To place appropriate controls on agents,stockholders with a large stake in the firm take an active role on the board of directors and a strong,independent board is established.

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Definitions:

Control Principle

An accounting principle that states the need for procedures and measures to regulate and ensure the accuracy of financial records.

Segregation of Duties

A key internal control mechanism that involves dividing responsibilities within an organization to reduce the risk of fraud or error.

Warehouse Custodian

An individual responsible for overseeing the storage and security of goods in a warehouse, ensuring proper inventory management and control.

Accounting Record

Documentation and books kept for the purpose of recording all financial transactions of an entity.