Which of the Following Statements About Internal Controls Are Correct

question 99

Multiple Choice

Which of the following statements about internal controls are correct?

• A)It is possible to have perfect (materially correct)financial statements and no internal controls.
• B)It is not possible to have perfect internal controls and materially incorrect financial statements.
• C)Testing internal controls answers the question,"Are the financial statements correct?" It only answers the question,"Are the controls working to prevent or detect misstatements in the financial statements?"
• D)Substantive tests answer the question,"Are the account balances correct?"
• E)Both A and B
• F)Both A and D
• G)Both B and D

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Definitions:

Consumer Protection Legislation

Laws designed to safeguard the rights and interests of consumers by regulating trade practices and ensuring fair transactions.

Legal Relationship

A bond or connection established between entities or individuals by the force of law, encompassing various forms such as contractual, familial, or corporate ties.

Verbal Offer

A verbal offer is an oral proposal or agreement, not written, about a transaction or contract, which can sometimes be legally binding in certain contexts.

Bilateral Contract

A type of contract that involves mutual obligations, where each party to the contract is both a promisor and promisee.