The Most Serious Limitation of Internal Controls Is

question 40

Multiple Choice

The most serious limitation of internal controls is

• A)internal controls frequently cost more than the benefit derived
• B)there is no causal relationship between good internal controls and good financial statements
• C)internal control testing requires a skill set that is costly
• D)internal controls have limited use in automated systems

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Definitions:

Groups

Collections of individuals or items classified together based on common characteristics or for the purpose of analysis.

Total N

The total number of observations or participants in a study or dataset.

Expected Frequencies

The counts or proportions one would expect in categories of a contingency table if there were no association between the variables.

Chi-square

A statistical test used to determine if there is a significant difference between observed frequencies and expected frequencies in one or more categories.