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When a company has a strong internal control structure, stockholders can expect the elimination of fraud....

  1. When a company has a strong internal control structure, stockholders can expect the elimination of fraud. Comment on the soundness of this statement.
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Answer #1

Strong internal contorl structure will help in minimizing frauds and in detecting frauds when they occur. But, for that there should be a continuous review of the internal control mechanism to ensure that it is working. If there are pitfalls, which may be due to changed circumstances, they should be rectified.

Hence, it can be said that, strong internal control structure, along with adequate review measures, can minimize frauds, though not eliminate it completely.

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