The best way to determine whether internal controls and ERM systems are functioning is through:
A) communication with external users of accounting reports.
B) managing a strategic balance between data availability and information overload.
C) monitoring of day-to-day activities.
D) reporting of ethical violations.

Question

Quizplus · Accepted Answer

Monitoring day-to-day activities is the most effective way to determine whether internal controls and ERM systems are functioning properly. This involves continuous observation and review of processes, procedures, and controls to ensure that they are being followed and are effective in preventing errors, fraud, and other risks. It also allows for timely detection and correction of any issues that may arise. Communication with external users and reporting of ethical violations are important aspects of risk management but may not necessarily provide a comprehensive assessment of internal controls and ERM systems. Managing a strategic balance between data availability and information overload may be relevant to data analysis and decision-making, but is not directly related to monitoring the effectiveness of internal controls and ERM systems.

The Best Way to Determine Whether Internal Controls and ERM