A Deficiency in Design of Internal Controls Exists When an Existing

question 17

True/False

A deficiency in design of internal controls exists when an existing control is not properly designed so that,even if the control operates as designed,the control objective would not be met.

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Definitions:

Finished Goods Units

Products that have completed the manufacturing process and are ready to be sold to customers.

Sales Budget

A detailed projection of anticipated sales, used for planning and managing resources in a business.

Optimistic Sales Budget

A sales budget that is prepared with the expectation of achieving the best-case scenario in sales volume and revenue.

Excessive Inventories

Situation where a company holds a larger quantity of inventory than necessary, which can tie up capital and increase holding costs.