Which of the following is a correct statement about internal controls?
A)The internal control function in a company is a process designed by management and others charged with governance to provide reasonable assurance that the financial statements are prepared in accordance with the COSO financial reporting framework.
B)Management develops internal controls to prevent or detect misstatements in the financial statements.
C)The auditor reviews the internal controls developed by management to assess whether the internal controls are effective in detecting misstatements.
D)The auditing standards define internal controls over financial statements as processes designed by management and others charged with governance to provide assurance that company responsibilities are met.

Question

Quizplus · Accepted Answer

Internal controls are processes designed by management to prevent or detect misstatements in the financial statements. While the auditor does review the internal controls to assess their effectiveness, they are not responsible for developing them. The auditing standards define internal controls over financial reporting as processes designed by management and others charged with governance to provide reasonable assurance that company responsibilities are met, but not necessarily that financial statements are prepared in accordance with the COSO framework.

Which of the Following Is a Correct Statement About Internal