What is management's primary purpose of effective internal control in an organization?
A)Obtaining high-quality data for making good business decisions.
B)Completion of a successful audit for the entity.
C)Shareholder involvement in the company's success.
D)Obtaining profitability and financial strength.

Question

Quizplus · Accepted Answer

The primary purpose of effective internal control is to obtain high-quality data for making good business decisions. This includes ensuring the accuracy and reliability of financial data, as well as other types of data that are important for managing the organization. Effective internal control helps management identify risks and take appropriate steps to mitigate those risks, which ultimately leads to better decision-making and increased confidence in the organization's financial reports. Completion of a successful audit, shareholder involvement, and obtaining profitability and financial strength are all important goals for an organization, but they are not the primary purpose of internal control.

What Is Management's Primary Purpose of Effective Internal Control in an Organization