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

Question

Quizplus · Accepted Answer

Management is responsible for designing and implementing internal controls to prevent or detect misstatements in the financial statements. This decision is based on the volume of transactions and the risk of material misstatement. If the volume of transactions is high, then the use of internal controls is justified.

Management Makes the Decision to Design Internal Controls to Prevent