Of the following statements about internal control, which one is not valid?
A) No one person should be responsible for the custodial responsibility and the recording responsibility for an asset.
B) Transactions must be properly authorized before such transactions are processed.
C) Because of the cost/benefit relationship, a client may apply control procedures on a test basis.
D) Control activities reasonably insure that collusion among employees cannot occur.

Question

Quizplus · Accepted Answer

Control activities can only reasonably deter collusion, not insure that it cannot occur. Collusion may still occur despite the existence of control activities.

Of the Following Statements About Internal Control, Which One Is