Internal controls:
A)Have four broad purposes.
B)Are key elements of the third step in a financial statement audit.
C)Both have four broad purposes and are key elements of the third step in a financial statement audit.
D)Neither have four broad purposes nor are key elements of the third step in a financial statement audit.

Question

Quizplus · Accepted Answer

Internal controls have four broad purposes: safeguarding assets, ensuring financial statement reliability, promoting efficiency and effectiveness of operations, and supporting compliance with laws and regulations. Internal controls are also a key element of the third step in a financial statement audit, which is evaluating and testing internal controls to determine their effectiveness in preventing material misstatements in the financial statements.

Internal Controls