A company should develop internal controls that provide reasonable, but not absolute, assurance that the financial statements are fairly stated.

Question

Quizplus · Accepted Answer

Internal controls are designed to provide reasonable assurance, not absolute assurance, that financial statements are accurate and reliable. This is because no system of internal controls can completely eliminate the risk of error or fraud. It is the responsibility of management to establish and maintain effective internal controls and to periodically assess their effectiveness.

A Company Should Develop Internal Controls That Provide Reasonable, but Not