Management makes the decision to design internal controls to prevent or detect misstatements in the financial statements based on whether the dollar amount of the balances in this process justifies the use of internal controls.

Question

Quizplus · Accepted Answer

Management designs internal controls to prevent or detect misstatements based on risk assessments, which consider both the likelihood and the impact of potential misstatements, not solely on the dollar amount of the balances.

Management Makes the Decision to Design Internal Controls to Prevent