Multiple Choice
Which of the following would indicate a strong control environment?
19
views
6. Internal Controls and Reporting Cash
Five Components of Internal Controls
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following would be a step in an internal control program?
A
Eliminating documentation requirements
B
Ignoring segregation of duties
C
Establishing procedures for authorizing transactions
D
Allowing unrestricted access to cash
Verified step by step guidance1
Understand the concept of internal control: Internal control refers to the processes and procedures implemented by an organization to safeguard assets, ensure accurate financial reporting, and promote compliance with laws and regulations.
Identify key components of internal control: These include segregation of duties, authorization of transactions, documentation requirements, physical controls, and regular monitoring.
Evaluate the options provided in the problem: Analyze each option to determine whether it aligns with the principles of internal control. For example, eliminating documentation requirements and ignoring segregation of duties weaken internal control, while establishing procedures for authorizing transactions strengthens it.
Focus on the correct principle: Establishing procedures for authorizing transactions ensures that only approved individuals can initiate or approve financial activities, reducing the risk of fraud or errors.
Conclude the analysis: Based on the evaluation, recognize that establishing procedures for authorizing transactions is a fundamental step in an effective internal control program.
8:05mWatch next
Master Five Components of Internal Controls with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Five Components of Internal Controls practice set
Problem sets built by lead tutorsExpert video explanations