Why is internal control so important?
A) Internal control is encouraged by several regulatory organizations, and it is required by law for publicly traded companies in an enactment in 1978 by the Cohen Commission.
B) Internal control is essential in lowering costs due to errors and irregularities in an organization by using risk assessment and risk management techniques.
C) Internal control enables management to maintain control over all its activities and it provides a measure of protection against erroneous or fraudulent financial reporting.
D) The U.S. Congress has enacted legislation requiring management of publicly-traded companies to report on the effectiveness of their internal control.

Question

Quizplus · Accepted Answer

Internal control provides a measure of protection against erroneous or fraudulent financial reporting, which is crucial for maintaining transparency and public trust in an organization. It also enables management to maintain control over all its activities, ensuring that resources are used effectively and efficiently. While the other options may be true, they do not fully capture the importance of internal control in managing risks and safeguarding organizational assets.

Why Is Internal Control So Important