When Internal Controls Are Effective

question 39

Multiple Choice

When internal controls are effective:

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

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Definitions:

Status Quo

The existing state of affairs or current condition, typically used to describe situations before any changes are made.

Fairness

A concept involving impartial and just treatment or behavior without favoritism or discrimination, often considered in ethical, legal, and social contexts.

Behavioral Economics

A branch of economics that examines how psychological, emotional, cognitive, cultural, and social influences impact the economic choices made by individuals and institutions.

Economic Behavior

The study of how individuals, businesses, and governments make choices on allocating resources to satisfy their wants and needs.