What Role Do Internal Controls Play in the Corporate Governance

question 91

Multiple Choice

What role do internal controls play in the corporate governance process?

• A)they make management responsible for the procedures used in financial reporting
• B)they make sure the financial statements are fairly stated
• C)they allow the auditor to gather sufficient information about significant accounts
• D)they make management take responsibility to establish and test internal controls

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Definitions:

Economist Expectation

The forecasts or predictions about economic factors like inflation, growth, or interest rates made by economists.

Quantity Demanded

The specific amount of a good or service that consumers are willing and able to purchase at a particular price.

Economic Profits

Profits calculated by subtracting both the explicit and implicit costs from total revenues, representing the additional value created beyond all opportunity costs.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the additional output will eventually decrease.