Management typically has the following three concerns, or broad objectives, in designing an effective control system: 1. Reliability of financial reporting
2) Efficient and effective operations
3) Compliance with applicable laws and regulations
4) Maximise profit for stakeholders
A) 2, 3, 4
B) 1, 2, 4
C) 1, 2, 3
D) 1, 3, 4

Question

Quizplus · Accepted Answer

The three concerns or broad objectives for management in designing an effective control system are reliability of financial reporting, efficient and effective operations, and compliance with applicable laws and regulations. While maximizing profit for stakeholders is an important objective, it is not typically considered a primary concern when designing a control system. Therefore, the best choice is C, which includes the three primary concerns of management in designing a control system.

Management Typically Has the Following Three Concerns, or Broad Objectives