Which of the following best defines internal control?
A) Internal rules and/or regulations with which organizations are expected to comply regarding accounting standards and preparation of financial data.
B) A process by which management gains reasonable assurance that its objectives will be achieved.
C) Procedures for input of and access to information systems used for internal analysis of an organization's short-term and long-term objectives.
D) A system of checks and balances that allows an organization to maintain control over its resources (data, systems, and all other assets).

Question

Quizplus · Accepted Answer

Internal control is a process established by an organization's management to provide reasonable assurance that the organization's objectives will be achieved. Internal control includes a range of activities including planning, executing, monitoring and reviewing operations. It helps to manage the risks associated with achieving the objectives and also helps to ensure the quality of information used in decision-making. The other options do not fully define internal control. Option A refers to accounting standards and preparation of financial data, Option C refers to information systems, and Option D refers to a system of checks and balances. While these concepts may be a part of internal control, they do not fully define it.

Which of the Following Best Defines Internal Control