When internal controls are effective,
A) there will be an increased reliance on substantive tests of transactions and account balances.
B) control risk will also be high.
C) the organization is more likely to achieve its strategic and operating objectives.
D) the organization is less likely to achieve its strategic and operating objectives.

Question

Quizplus · Accepted Answer

When internal controls are effective, the organization is more likely to achieve its strategic and operating objectives. This is because effective internal controls help to ensure that the organization's resources are used efficiently and effectively, that risks are identified and managed appropriately, and that financial information is reliable and accurate. As a result, the organization can make informed decisions and take actions that are aligned with its goals and objectives. This does not necessarily mean that reliance on substantive tests of transactions and account balances will increase, nor does it mean that control risk will be high.

When Internal Controls Are Effective