A system of internal control consists of policies and procedures designed to provide management with
A)reasonable assurance that the company achieves its objectives.
B)assurance that fraud will be prevented.
C)reasonable assurance that fraud will be detected.
D)assurance that the firm's resources will be used in the optimal way.

Question

Quizplus · Accepted Answer

A system of internal control is designed to provide reasonable assurance to the company's management that the organization achieves its objectives. These objectives may include the following: efficient and effective operations, reliable financial reporting, compliance with applicable laws and regulations, and safeguarding of assets. Internal controls also help to ensure that resources are used efficiently and effectively. While preventing and detecting fraud can be a byproduct of implementing internal controls, it is not the primary purpose.

A System of Internal Control Consists of Policies and Procedures