A company's internal control system:
A)Eliminates the risk of loss.
B)Monitors and controls business activities.
C)Eliminates human error.
D)Eliminates the need for audits.
E)Is not necessary in large companies.

Question

Quizplus · Accepted Answer

A company's internal control system helps to monitor and control business activities, reducing the risk of fraud and errors. It cannot completely eliminate the risk of loss, human error, or wrongdoing, but it can reduce them. However, an internal control system does not eliminate the need for audits, as audits serve to provide an independent evaluation of the effectiveness of the company's internal control system.

A Company's Internal Control System