To Have a Strong Internal Control System, a Business Must

question 26

Multiple Choice

To have a strong internal control system, a business must have good administrative controls. Administrative controls include:

• A) the reconciliation of the bank statement.
• B) the accuracy of the recording procedures.
• C) assessing compliance with company policies.
• D) maintenance of accurate inventory records.

Compute and analyze the impact of currency translation on loans and interest expenses.

Identify key disclosure requirements under AASB 121 related to foreign currency transactions.

Evaluate the financial impact of changes in exchange rates on asset valuations and recognize gains or losses accordingly.

Apply knowledge of currency exchange rates to recalculate and report financial transactions in the functional currency.

---

Definitions:

Professional Bureaucracy

An organizational structure where power is held by professionals with specialized knowledge rather than through formal managerial positions.

Standardization

The process of implementing and developing technical standards to ensure consistency, safety, and efficiency across products, services, and procedures.

Coordination

The organization of the different elements of a complex body or activity so as to enable them to work together effectively.

Machine Bureaucracy

A highly structured organizational form that operates through standardized procedures and a clear hierarchy of authority.