Michael and Michelle Are Partners in M & M Consulting

question 31

Essay

Michael and Michelle are partners in M & M Consulting, a firm that specializes in technology-related issues for accounting information systems. They are currently working with a large publicly-traded corporation to implement XBRL for financial reporting to the SEC. The partners are illustrating XBRL to the client's board of directors using a purchase order as an example.
-The basic purposes of internal control are: safeguarding assets, ensuring financial statement reliability, promoting operational efficiency and encouraging compliance with management's directives. Assume the client implements XBRL. Suggest one XBRL-related internal control that will help address each of the four basic purposes. Do not use the same control more than once.

---

Definitions:

Game Theory

A mathematical framework used for analyzing situations in which parties make decisions that are interdependent, often used in economics, political science, and psychology to predict outcomes in strategic interactions.

Four-Firm Concentration Ratio

The percentage of total industry sales accounted for by the top four firms in an industry.

Total Sales

The total revenue generated from the sale of goods or services over a set period before any expenses are subtracted.

Four-Firm Concentration Ratio

An economic metric that assesses the market power of the four largest firms in an industry, expressed as a percentage of total market sales.