When Internal Controls Are Effective

question 2

Multiple Choice

When internal controls are effective:

• A)the organisation is more likely to achieve its strategic and operating objectives
• B)there will be an increased reliance on substantive tests of transactions and account balances
• C)control risk will also be high
• D)the organisation is less likely to achieve its strategic and operating objectives

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Definitions:

Banking System

The network of institutions that provide financial services, including the management, distribution, and creation of money among individuals, businesses, and governments.

Reserve Requirement

This is the minimum amount of funds that a bank must hold in reserve against deposits made by customers, a critical tool in monetary policy.

Money Supply

The total amount of money available in an economy at a specific time, including cash and various types of deposits.

Government Securities

Financial instruments issued by the government to finance its expenditures, offering a return to the investors.