The basic concept of internal control that recognizes the cost of internal control should not exceed the benefits expected to be derived is known as:
A)Reasonable assurance.
B)Management responsibility.
C)Limited liability.
D)Management by exception.

Question

Quizplus · Accepted Answer

The basic concept of internal control that recognizes the cost of internal control should not exceed the benefits expected to be derived is known as "reasonable assurance". This means that internal controls should be cost-effective and provide a reasonable level of assurance that the organization's objectives are being met. Management responsibility, limited liability, and management by exception are related but distinct concepts in internal control.

The Basic Concept of Internal Control That Recognizes the Cost