Which of the following concepts recognizes that managers must use their judgment to ensure that the cost of control does not exceed the system's benefits or the risks involved?
A)competitive intelligence
B)reasonable assurance
C)separation of duties
D)risk assessment

Question

Quizplus · Accepted Answer

Reasonable assurance recognizes that managers must use their judgment to balance the cost of implementing internal control measures with the benefits gained from those measures and the risks involved. While risk assessment is important in determining the extent of internal controls needed, it is only one part of the overall decision-making process regarding internal control implementation. Competitive intelligence and separation of duties are also important internal control concepts, but do not directly relate to the balancing of costs and benefits.

Which of the Following Concepts Recognizes That Managers Must Use