Reasonable assurance allows for
A) low likelihood that material misstatements will not be prevented or detected by internal controls.
B) no likelihood that material misstatements will not be prevented or detected by internal control.
C) moderate likelihood that material misstatements will not be prevented or detected by internal control.
D) high likelihood that material misstatements will not be prevented or detected by internal control.

Question

Quizplus · Accepted Answer

Reasonable assurance in the context of internal controls means that there is a low likelihood that material misstatements will not be prevented or detected. It acknowledges that while internal controls are designed to manage risk, they cannot guarantee absolute assurance against material misstatements.

Reasonable Assurance Allows for