Which of the Following Statements About Internal Controls Are Correct

question 6

Multiple Choice

Which of the following statements about internal controls are correct?

• A)It is not 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?"
• D)Substantive tests answer the question,"Are the account balances and classes of transactions correct?"
• E)What companies say they do is often quite different from what they actually do.
• F)Both A and B
• G)Both C and D
• H)Both D and E

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Definitions:

Divided Attention

The ways a cognitive processor allocates cognitive resources to two or more tasks that are carried out simultaneously.

Modalities

Different ways or modes through which something can be done or perceived, such as the sensory modalities (sight, sound, touch, etc.).

Attention Stream

A continuous flow of perceptual information that an individual focuses on at any given moment.

Cognitive Spotlight

The focusing of attention and cognitive resources on a specific area or aspect of the environment or thought.