CIMA BA3 · Chapter 8 · Question 1 of 10
What is the main purpose of internal controls in an accounting system?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) To help ensure that transactions are properly authorised and recorded, assets are safeguarded, and errors and fraud are prevented or detected
Explanation
Internal controls give reasonable, not absolute, assurance that the business is run in an orderly way, that assets are protected and that the accounting records are accurate and complete. They do not remove the legal need for an audit, and they have nothing to do with maximising reported profit.
More Control of accounting systems MCQs
- Q3What is the main role of an external auditor of a limited company?
- Q4Which of the following statements about internal audit is correct?
- Q5A cashier steals money received from customer A, then uses money later received from customer B to clear customer A's account, and so on…
- Q6Which of the following is best described as a detective control rather than a preventive control?
- Q7Which of the following is an authorisation control over purchases?