The primary purpose of internal controls in managing a business is to: A. encourage theft and ensure that segregation of duties does not take place. B. ensure that employees operating within the scope of their assigned responsibilities and act in the best interest of the business. C. prevent cash from being stolen. D. ensure that financial statements are a faithful representation of the company’s financial performance.

Answered: Image /qna-images/answer/590210f4-47b5-44c5-a5b4-077245f34ed8.jpg

Answered: The primary purpose of internal…

Business

Accounting

The primary purpose of internal controls in managing a business is to:

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 4MC: Which of the following is not considered to be part of the internal control structure of a company?...

See similar textbooks

Related questions

Q: Indicate which statements are true and which are false. The primary objective of internal control…

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: The management fraud is committed by a top level management employee? Give an example of those top…

A: frauds committed by management ( top-level ) - - management frauds are committed by top-level…

Q: The use of a bank account addresses which objective of internal control? Group of answer choices…

A: A bank account is an account with a bank for an enterprise. It reflects the balance of cash kept in…

Q: Determine whether each procedure described below is an internal control strength or weakness; then…

Q: Understanding Sarbanes-Oxley and identifying internal control strengths and weaknesses The following…

A: 1.Internal control: Internal control is a process which ensures continuous reliability of…

Q: There are three internal control objectives and they are to safeguard the company's reputation,…

A: The correct option is false as internal control has an objective to ensure financial reports with…

Q: dicate which statements are true and which are false. Bonding key employees helps reduce risk of…

A: Basic Concept of Audit and Assurance

Q: will hurt employee morale. The same employee requests, records, and makes payment for purchases of…

A: internal controls , mechanism rules and procedures that is implemented by the company in order to…

Q: Which of the following does not demonstrate internal control practices? a. Allowing access of…

A: Internal control is a set of measures instituted by management and designed to help. achieve the…

Q: What is a critical element of internal control in the handling of receivables by a business? Explain…

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: Which of the following is/are true? Multiple Choice The primary goal of internal controls for cash…

A: The internal control is maintained by management.

Q: Proper segregation of duties reduces opportunities to allow any employee to be in a position to…

A: The correct Option is Option “D”. D. Record and conceal fraudulent transactions in the normal course…

Q: Which of the following illustrates the internal control principle of document a. A company pays its…

A: An important factor in internal control is the reporting of important company information. The…

Q: Which of the following is not a purpose of internal controls? Guarantee profits Protect…

A: Internal control can be defined as a system to follow the rules and mechanism in the organisation so…

Q: Petty Cash is easily misappropriated if business processes and internal controls are not established…

A: Petty cash means the cash allocated to meet small day to day expenses of the business. If proper…

Q: The impact of weak internal controls can affect an employee’s fraud behavior. The role of…

A: An internal control system is the sum of a large number of activities comprising of policies,…

Q: What does it mean to say that internal control has limitations and what are these limitations?

A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…

Q: There are two common causes of business and accounting fraud:• A failure of individual character• A…

A: Internal control: Internal control is a method that avoids material errors in the preparation of…

Q: Companies set up internal controls to protect against fraud and waste. true or false

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: Indicate which statements are true and which are false. 1. Internal control procedures should be…

A: solution introduction internal control is the procedures that are laid down by the management for…

Q: a) Internal controls play an important role in reducing the risks of fraudulent activities in any…

A: The internal control system includes administrative control and accounting control of cash. Cash…

Q: What type of internal controls are job rotation, preparation of bank reconciliations, segregation of…

A: Internal control: Internal control is a policy or procedures enforced by management in an…

Q: What are the collective procedures implemented by management to ensure that business activities are…

A: Dear student as per Bartleby answering guideline we can answer the only first independent question…

Q: Internal controls play an important role in reducing the risks of fraudulent activities in any…

A: Internal controls are the principles, policies, procedures formed by the management of the Company…

Q: The given system flowchart elaborates the business activities involved in different departments,…

A: TYPES OF FRAUD IN BUSINESS ENVIRONMENT 1. Identify theft = In identify theft fraudster could…

Q: ties of Internal IT Developer of company is to write application programs and then perform required…

A: Segregation of duties refers to the internal control design made to disperse the duties in order to…

Q: Explain why collusion between employees and management in the commission of fraud is difficult to…

A: Fraud refers to an act which is committed intentionally by one person which results in financial…

Q: earch a company that had a fraud event happen due to inadequate accounting procedures. Review the…

A: Accountiing control is implemented to ensure the validity and accuracy of financial statements ie…

Q: $1: In obtaining an understanding of the internal control policies and procedures, the auditor noted…

A: Internal control is a part of auditing done from the part of an organization to keep a control over…

Q: Internal control is said to be the backbone of all businesses. Which of the following is the…

A: Every business organisation has its own objectives and goals. Business wants to achieve that goals…

Q: Explain the impact of the fraud in business according to accounting information system.

A: AIS (Accounting Information System) defines fraud as an action that can affect many people within…

Q: A code of ethics is an important element of a fraud prevention program. Which of the following would…

A: Fraud: Fraud is the act of deliberately conducting false reporting of facts, to acquire funds or…

Q: At Radiant, Inc., the sales department is also responsible for recording cash transactions as it…

A: THE SEPARATION OF DUTIES IN AUDITING IS THE IDEA OF REQUIRING MORE THAN ONE PERSON TO COMPLETE…

Q: What is a appropriate control procedures that would have prevented or detected the theft of cash in…

A: Internal controls are the proactive measures that management takes to protect financial information…

Q: Which of the following is an example of poor internal control in an organization?a. The company…

A: Internal Control: Internal control refers to the policies, and plans of the business organization…

Q: Internal control does not consist of policies and procedures that a. ensure employees and managers…

A: Internal control consists of policies and procedures which is implemented in the organisation so…

Q: There are two common causes of business and accounting fraud: • A failure of individual character •…

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: What internal control procedure ( s ) would provide protection against the following threats ? An…

A: Internal control: this is a procedure in auditing which helps the entity in maintaining the…

Q: Which internal control activity is being violated when the cashier in a retail store also records…

A: Segregation of duties is being violated when the cashier in a retail store also records the daily…

Q: What types of physical controls are in place to protect company assets (assets include inventory,…

A: Hi, since you have posted multiple questions, we are solving the 1st question for you. To get the…

Q: Which of the following reflects a weak internal control system? Please explain with full…

A: In order to maintain a strong internal control in the organization, the organization must follow the…

Q: Select the necessary words from the list of possibilities to complete the following statements. 1.…

A: Internal control: Internal control as defined by the Committee of Sponsoring Organizations of the…

Q: Ensuring internal control over the collection of receivables Consider internal control over…

A: In order to prevent the cash frauds, the following jobs must be withheld from a company’s credit…

Q: rimary role of internal controls in managing a business? a.To ensure that the financial statements…

Q: From pages 4-1 and 4-2 of the VLN, the COSO Framework describes 5 components of internal control.…

A: Ans. B - 2 and 3 2. To help safeguard the company's assets. 3. To help improve the accuracy and…

Question

The primary purpose of internal controls in managing a business is to:

A. encourage theft and ensure that segregation of duties does not take place.
B. ensure that employees operating within the scope of their assigned responsibilities and act in the best interest of the business.
C. prevent cash from being stolen.
D. ensure that financial statements are a faithful representation of the company’s financial performance.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following is not considered to be part of the internal control structure of a company? A. Ensure that assets are kept secure. B. Monitor operations of the organization to ensure maximum efficiency. C. Publish accurate financial statements on a regular basis. D. Ensure assets are properly used.
Internal control is said to be the backbone of all businesses. Which of the following is the best description of internal controls? A. Internal controls ensure that the financial statements published are correct. B. The only role of internal controls is to protect customer data. C. Internal controls and company policies are important to protect and safeguard assets and to protect all company data and are designed to protect the company from fraud. D. Internal controls are designed to keep employees from committing fraud against the company.
Which of the following is NOT one of the purposes of internal control? a. to guarantee the success of the business b. to safeguard the entity’s assets and resources c. to deter errors, fraud, and theft d. to ensure the accuracy and completeness of the accounting data
The objectives of internal control are to a. prevent fraud and promote the social interest of the company Ob. provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with c. control the internal organization of the Accounting Department personnel and equipment d. provide control over "internal-use only" reports and employee internal conduct
The objectives of internal control are to ensure efficient operations and provide reasonable assurance of all of the following EXCEPT A. employees and managers comply with laws and regulations. B. profits are maximized while minimizing spending. C. business information is accurate. D. assets are safeguarded and used for business purposes. A deposit received by the bank will include: A. a credit to the company's bank account. B. no increase or decrease is made to the company's bank account. C. a credit to the cash account on the company's books. D. a debit to the company's bank account. When a bank debits your account, it is decreasing the balance. True False
An accounting manager, who has full access to a Company’s accounting system also has access to the bank account and is able to send cash payments without supervision. What is an internal control that should be implemented to reduce the risk of theft or fraud in this company?
Internal control is said to be the backbone of all businesses. Which of the following is the bestdescription of internal controls?A. Internal controls ensure that the financial statements published are correct.B. The only role of internal controls is to protect customer data.C. Internal controls and company policies are important to protect and safeguard assets and to protect allcompany data and are designed to protect the company from fraud.D. Internal controls are designed to keep employees from committing fraud against the company.
Internal control consists of the plan of organization and all of the related methods and measures adopted within a business to (a) safeguard its assets, and (b) enhance the accuracy and reliability of its accounting records. True O False
Which of the following is not considered to be part of the internal control structure of a company? O Ensure that assets are kept secure. O Monitor operations of the organization to ensure maximum efficiency. O Publish accurate financial statements on a regular basis. O Ensure assets are properly used.
Which one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errors
Internal controls are crucial to ensuring that financial transactions are authorized and company records are maintained properly. Please explain some of the internal control procedures that accounting departments utilize to achieve the aforementioned goals. How do these internal controls help accounting departments achieve their objectives?
Indicate which statements are true and which are false. The primary objective of internal control procedures is to safeguard the business against theft from government agencies.