The basic concept of internal control which recognises that the cost of internal control should not exceed the benefits expected to be derived is known as:
A) reasonable assurance.
B) management responsibility.
C) limited liability.
D) management by exception.

Question

Quizplus · Accepted Answer

The basic concept of internal control which recognises that the cost of internal control should not exceed the benefits expected to be derived is known as reasonable assurance. This means that the cost of implementing internal control measures should not be higher than the benefits that are expected from having these controls in place. This principle helps to ensure that internal controls are cost-effective and efficient, and that organisations do not spend more than is necessary on internal control measures.

The Basic Concept of Internal Control Which Recognises That the Cost