A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records

Question

BlackTom AI · Accepted Answer

The item presents a statement about internal control: that a good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records. 
Option 1: True. This statement aligns with fundamental objectives of internal control frameworks (such as COSO), which emphasize safeguarding assets through controls and improving the reliability and integrity of financial reporting and records. The components typically include safeguarding assets, establishing control activities, and ensuring accurate accounting data, so this option reflects established principles.
Option 2: False. This would imply that a robust internal control system does not protect assets or improve accounting accuracy, which contradicts the purpose of internal controls. If controls are well designed and implemented, they should both deter asset theft or loss and reduce the risk of misstatement in the financial records. Therefore, labeling the statement as false would ignore the core functions of internal control systems.

ACCT 200 Q #19 Internal Control

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records

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