Introduction: Internal control is the process implemented by the company’s officials which helps in achieving organizational objectives of effectively managing operations, reporting and compliance with processes and laws.
To choose: Whether the given statement is true or false.
Answer to Problem 1CYBK
The given statement is true.
Explanation of Solution
When there is effective control implemented in the organization, adherence to best internal practices and procedures is ensured. When best practices are implemented, it helps in achieving efficiency in all activities of the organization implying wastes are controlled, process time are reduced and delays in processes are controlled. Financial reporting which is important both internal and external users of financial statements can be done effectively, speedily and accurately. When reports are available in time and contains all required details, it provides scope for more informed decisions. Thus, the given statement is true.
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Chapter 3 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
- Which one of the following components of internal control over financial reporting sets the tone for the organization? a. Risk assessment. b. Control environment. c. Information and communication. d. Monitoring.arrow_forwardRefer to Exhibit 3.9. What are the important features of management’s report on internal control over financial reporting?arrow_forwardProfessional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forward
- Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.arrow_forwardRefer to Exhibit 3.10 and Exhibit 3.11. Describe management’s process for evaluating internal control over financial reporting. For the control environment principles, identify evidence that management might obtain to assess the operating effectiveness of the control environment.arrow_forward
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