BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lowers the company’s risk of loss
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Insures profitable operations
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Eliminates the need for an audit
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Requires the use of non-computerized systems
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Detailed explanation-1: -A properly designed internal control system Lower’s the company’s risk of loss It does not insure profitable operations, it merely detects or prevents. It does not eliminate the need of audit.
Detailed explanation-2: -Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws.
Detailed explanation-3: -An effective system of internal control can give managers the means to provide accountability for their programs, as well as the means to obtain reasonable assurance that the programs they direct meet established goals and objectives.
Detailed explanation-4: -Detective internal controls protect a company’s assets by finding errors when they occur so that business owners can minimize their impact on the company.