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Explain Why Internal Control Is an Important Aspect of an Accounting

question 36

Essay

Explain why internal control is an important aspect of an accounting system, providing at least two specific examples that would be in the policies and procedures of internal control.


Definitions:

Socially Optimal

A condition where resources are allocated in the most efficient way from the society's point of view, maximizing overall welfare.

Common Resource

A resource like air or water that is not owned by anyone, can be used by everyone, and is difficult to exclude others from using.

Artificially Scarce Good

A product or service whose supply is intentionally restricted to increase its price or value, often contrary to its natural abundance.

Pay-Per-View

A service by which viewers can purchase events to be viewed on television and pay for the private telecast of that event to their homes.

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