When Can Internal Controls to Prevent Fraud Can Be Ineffective

question 31

Multiple Choice

When can internal controls to prevent fraud can be ineffective?

• A)When banking institutions go out of business or merge with other banking institutions.
• B)When standard operating procedures are followed.
• C)When collusion exists between two or more employees.
• D)When customers invoke the Foreign Corrupt Practices Act.

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Definitions:

Direct Labor Cost

The total expense for labor directly involved in the manufacturing of products, including wages and other associated costs.

Unit Product Cost

The total cost to produce one unit of product, including direct material, direct labor, and manufacturing overhead.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, detailing how net revenue is transformed into net earnings.

Variable Costing

An accounting method that only includes variable production costs (costs that change with the level of output) in product costs.