Question

Which is NOT a broad purpose of Internal Control?

Internal Control helps management to achieve:

	1.	Compliance with applicable laws
	2.	Reliable financial reporting
	3.	Operations that are effective and efficient
	4.	Effective budgeting

Internal Control is:

	1.	the accounting cycle
	2.	the process to help a company meets its operational and financial reporting objectives
	3.	A report prepared in 2013 by forensic accounting firm Warfield & Associates
	4.	showing that debits = credits

A component of internal control is:

	1.	risk assessment
	2.	journals
	3.	subsidiary ledgers
	4.	controlling accounts

Answer 1

Answer(1): "Effective budgeting" is NOT a broad purpose of Internal Control.

The purposes of internal control are effective and efficient operations of business, reliable financial statements and applicable laws for business.

Answer(2): Internal Control is, "The process to help a company meets its operational and financial reporting objectives. Internal control is the process of achieving the business goals.

Answer(3): A component of internal control is, "Risk assessment".

There are five components of internal control-

1. Control environment
2. Risk assessment
3. Control activities
4. Information & Communication
5. Monitoring