Management often uses internal controls in the acquisition and expenditure process because of
A)the requirements of the Sarbanes-Oxley Act
B)the large volume of transactions in the process
C)the requirements of the AICPA
D)the large balances in the process

Question

Quizplus · Accepted Answer

Internal controls in the acquisition and expenditure process are used primarily due to the large volume of transactions involved. By implementing internal controls, management can reduce the risk of errors, fraud, and inefficiencies in the process, ensuring that transactions are properly authorized, recorded, and reported. While the Sarbanes-Oxley Act and the AICPA provide guidelines for internal controls, they do not mandate their use in the acquisition and expenditure process. Large balances in the process may also be a consideration, but it is not the primary reason why internal controls are used.

Management Often Uses Internal Controls in the Acquisition and Expenditure