Even with the best possible internal control system in place, its effectiveness still depends on what?
A) Creating an expectation of punishment.
B) Identifying the nature of the risks involved and the losses that could result from these risks.
C) The competency and dependability of the people enforcing it.
D) All of the above.

Question

Quizplus · Accepted Answer

A: Incorrect - This is an important aspect of deterring fraud, but it doesn't ensure that internal controls will be effective.
B: Incorrect - This is a way to determine what kind of control activities an organization should have in place - not a way to enforce controls.
C: Correct - It is vital that the people enforcing the controls are competent or else opportunities for fraud will be available.
D: Incorrect - This is, by prior elimination, incorrect.

Even with the Best Possible Internal Control System in Place