Internal controls are not designed to provide reasonable assurance that
A) Transactions are executed in accordance with management's authorization.
B) Embezzlement will be eliminated.
C) Access to assets is permitted only in accordance with management's authorization.
D) Amounts recorded for assets is compared with the actual existing assets at reasonable intervals.

Question

Quizplus · Accepted Answer

Internal controls are designed to provide reasonable assurance that transactions are executed in accordance with management's authorization, access to assets is permitted only in accordance with management's authorization, and amounts recorded for assets are compared with the actual existing assets at reasonable intervals. However, internal controls cannot completely eliminate the risk of embezzlement. It can only reduce the risk to an acceptable level. Therefore, option B is the correct answer as it is the only option that states something that internal controls cannot provide assurance of.

Internal Controls Are Not Designed to Provide Reasonable Assurance That