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:

Economic Conditions

The state of the economy at a given time, including factors like unemployment rates, inflation levels, and gross domestic product (GDP).

Suicide Rates

indicate the number of suicides occurring within a given population and time frame, often per 100,000 individuals annually.

Biological Predispositions

The inherent tendencies or propensities individuals have towards certain behavior or diseases due to their genetic make-up.

Society Responds

The collective reactions or adaptations of a community or society to events, trends, or challenges.