The board of directors consists entirely of personal friends of the chief executive officer. This indicates a weakness in
A) the accounting system
B) the control environment
C) control procedures
D) this is not a weakness

Question

Quizplus · Accepted Answer

The board of directors is responsible for providing oversight and guidance to the organization. However, if the board consists entirely of personal friends of the CEO, it can lead to conflicts of interest and a lack of objective decision-making. This indicates a weakness in the control environment, which refers to the overall tone and culture of the organization regarding control activities.

The Board of Directors Consists Entirely of Personal Friends of the Chief