A good system of internal control:
A) Encourages adherence to prescribed managerial policies.
B) Promotes operational efficiencies.
C) Eliminates the need for an audit.
D) Both encourages adherence to prescribed managerial policies and promotes operational efficiencies.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

A system of internal control that encourages adherence to prescribed managerial policies and promotes operational efficiencies is considered a good one. It helps ensure that the organization's objectives are achieved effectively and efficiently while also complying with laws and regulations. However, it does not eliminate the need for an audit, which serves as an independent assessment of the effectiveness of the internal control system. Thus, answer choice E is incorrect.

A Good System of Internal Control