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 recognized in the Statements on Auditing Standards.
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 COSO definition of internal control is recognized in the Statements on Auditing Standards, which indicate that auditors should obtain an understanding of internal control and assess its effectiveness. Option A is incorrect because the definition is not limited to internal auditing applications, but rather applies to all aspects of an organization's operations. Option C is incorrect because COSO emphasizes the importance of reliable financial reporting in addition to effectiveness and efficiency of operations. Option D is incorrect because COSO views internal control as a process or means to obtain an end, rather than an end product.

Which Statement Is Correct Concerning the Definition of Internal Control