BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To protect cash accounts from theft
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To help managers make wise business decisions
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To record transactions as they are completed
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To make sure that accounting information is accurate
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Detailed explanation-1: -Ensure the reliability and integrity of financial information-Internal controls ensure that management has accurate, timely and complete information, including accounting records, in order to plan, monitor and report business operations.
Detailed explanation-2: -Internal controls are intended to prevent errors and irregularities, identify problems and ensure that corrective action is taken.
Detailed explanation-3: -Primarily, internal controls ensure compliance with accounting laws and regulations by a firm. This helps a company identify its accounting problems and correct them even before internal audits commence. It is vital to note that internal controls are not the same for all companies.
Detailed explanation-4: -Management and external auditors must evaluate a company’s internal controls for material misstatements-doing so helps maintain the integrity of financial reporting.