Before any internal control procedure is initiated, a question which should be addressed by the company is:
A)Will this stop all theft?
B)Is this the best security money can buy?
C)How much benefit will be derived from the cost of the procedure?
D)Will this prevent all accounting errors?

Question

Quizplus · Accepted Answer

Internal control procedures are designed to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. The cost-benefit principle is crucial in deciding whether to implement a specific control procedure. It's understood that no system can completely eliminate the risk of theft or accounting errors, and not all controls are financially feasible. Therefore, assessing the benefits derived relative to the cost is a practical approach for companies when considering new internal control procedures.

Before Any Internal Control Procedure Is Initiated, a Question Which