Internal controls are designed to accomplish five objectives-comply with legal requirements, promote operational efficiency, safeguard assets, encourage employees to follow company policy and:
A) prevent embezzlement.
B) prevent collusion.
C) ensure accurate, reliable external audits.
D) ensure accurate, reliable accounting records.

Question

Quizplus · Accepted Answer

The five objectives of internal controls are to comply with legal requirements, promote operational efficiency, safeguard assets, encourage employees to follow company policy, and ensure accurate and reliable accounting records. Preventing embezzlement and collusion are ways to accomplish the objectives of safeguarding assets and promoting operational efficiency, respectively. However, ensuring accurate and reliable accounting records is a broader objective that encompasses all the other objectives and is essential for making sound business decisions and complying with legal requirements. So, option D is the best choice.

Internal Controls Are Designed to Accomplish Five Objectives-Comply with Legal