Which of the following statements about internal control is correct?

Question

Quizplus · Accepted Answer

Choice "B" is correct. Internal control is relevant to the entire entity, or to any of its operating units or business functions. Choice "A" is incorrect. There is a direct relationship between: 1. An entity's objectives, which are what the entity strives to achieve, and 2. The components of internal control, which represent what is needed to achieve the objectives. Choice "C" is incorrect. Not all of the entity's objectives and related controls are relevant to an audit of the entity's financial statements. Choice "D" is incorrect. Although internal control is relevant to each of the entity's operating units and business functions, an understanding of internal control relevant to each operating unit and business function may not be necessary to plan and perform an efficient audit.

Which of the Following Statements About Internal Control Is Correct