Which statement is correct concerning the definition of internal control developed by the Committee of Sponsoring Organizations (COSO)?
A)Its applicability is largely limited to internal auditing applications.
B)It is a 'process' effected by individuals.
C)It emphasizes the effectiveness and efficiency of operations over the reliability of financial reporting.
D)It suggests that it is important to view internal control as an end product as contrasted to a process or means to obtain an end.

Question

Quizplus · Accepted Answer

The definition of internal control developed by COSO states that it is a "process" effected by individuals, indicating that it is not limited to internal auditing applications but a broader concept that applies to all aspects of an organization's activities. It also emphasizes the importance of reliability of financial reporting, contrary to option C, and stresses that internal control is a means to obtain an end, not an end product in itself, making option D incorrect.

Which Statement Is Correct Concerning the Definition of Internal Control