Question 9Which of the following is correct with regard to internal controls.1 pointThe fraud triangle inherently assumes no internalcontrolsThe fraud scale inherently assumes no internalcontrolsThe triangle of fraud action inherently assumes nointernal controlsSegregation of duties is most likely the most important internalcontrol
Question
Question 9Which of the following is correct with regard to internal controls.1 pointThe fraud triangle inherently assumes no internalcontrolsThe fraud scale inherently assumes no internalcontrolsThe triangle of fraud action inherently assumes nointernal controlsSegregation of duties is most likely the most important internalcontrol
Solution
The correct answer is: Segregation of duties is most likely the most important internal control.
Here's why:
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The fraud triangle does not inherently assume no internal controls. The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which can lead to fraudulent behavior: pressure, opportunity, and rationalization. Internal controls can help reduce the 'opportunity' component.
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The fraud scale also does not inherently assume no internal controls. Similar to the fraud triangle, it's a model used to explain why people commit fraud. It includes perceived pressure, perceived opportunity, and rationalization.
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The triangle of fraud action is not a recognized term in the context of fraud or internal controls.
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Segregation of duties is indeed a very important internal control. It reduces the risk of error and fraud by ensuring that no single individual has control over all stages of a process or transaction. By dividing responsibilities among different people, it creates a system of checks and balances.
Similar Questions
Internal controls have certain limitations. Identify the alternative that is not one of those limitations.a.Controls are directed at routine and non-routine transactions.b.Management can abuse their responsibility.c.The potential of human error exists.d.The cost of implementing a control could exceed it benefits
Which of the following statements is true about internal controls over financial reporting?Select answer from the options belowSpecific controls are unnecessary if broad controls have been implemented.Management should not assume that all controls are effective at all times.External audit fees will not change regardless of the effectiveness of internal controls.The best-designed controls are not subject to failure or circumvention.
Which of the following statements about internal control is correct?Select one:a.Exceptionally strong control allows the auditor to eliminate substantive tests.b.The cost-benefit relationship should be considered in designing internal control.c.Properly maintained internal controls reasonably assure that collusion among employees cannot occur.d.Establishing and maintaining internal control is the internal auditor's responsibility.
Internal control is defined, in part, as a plan that... Question 3Answera.enhances the accuracy and reliability of accounting recordsb.all of the other options are correctc.eliminates mistakes and errorsd.prevents robbery and theft
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