Question

What are management's incentives for establishing and maintaining strong internal controls? What would be the disadvantages/potential...

What are management's incentives for establishing and maintaining strong internal controls? What would be the disadvantages/potential weaknesses and costs?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Strong internal controls ensure that assets and recordsare properly safeguarded. Management also needs a control system that generates reliable information decision making. If the information system does not generate reliable information, management may be unable to make informed decisions about issues such as product pricing, cost of production, and profit information.

The disadvantage may be it is time consuming, also it can be lack of knowledge, or may be it is difficult to understand and cost sensitive.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Accounting is important to society and internal controls are an important part of ensuring the integrity...
Accounting is important to society and internal controls are an important part of ensuring the integrity and reliability of accounting information. The first step in creating a strong system of internal control is the establishment of a steadfast foundation of corporate governance. This foundation establishes the guidelines by which management will act as an example for employees and the public. Measures are needed to establish this foundation such as a corporate code of conduct. Once these measures are in place,...
Assume you are considering the internal controls related to inventory for a potential new audit client....
Assume you are considering the internal controls related to inventory for a potential new audit client. In the course of your study, you discover the manager of the firm’s merchandise inventory warehouse has the ability to approve customer orders for creditworthiness. He is also responsible for loading all merchandise from the warehouse onto trucks for shipment to customers. Explain how these activities of the warehouse manager would affect your initial view of control risk related to inventory. Be specific.
1. How would you develop a system of internal controls for your organization? 2. What specific...
1. How would you develop a system of internal controls for your organization? 2. What specific policies would you put in place? What areas of the organization would be covered? 3. How would you install a process of review and enforcement? who would be involved? 4. What would you use as a reporting approach to senior leadership and the board of Directors?
List at least 4 inherent risks of the following business. What controls you would suggest mitigating...
List at least 4 inherent risks of the following business. What controls you would suggest mitigating those risks. i. A retail business such as a service station/food center ii. A construction business Why do you think clearly defined policies and procedures are important for Internal Control perspective? Please strengthen your answer with examples.
What type of vaccine would be MOST effective against tuberculosis, a disease that requires a strong...
What type of vaccine would be MOST effective against tuberculosis, a disease that requires a strong CD4+ T-cell response Inactivated Live attenuated Toxoid Subunit DNA Which of the following is NOT a good candidate for immunodeficiency replacement therapy? Immunoglobulin Defective genes Hematopoietic stem cells All of the answers are good candidates IFN-γ Which of the following is a potential cause of chronic inflammation? Tissue damage Intestinal commensal microbiota components All of the answers are correct Obesity Infectious agents 1 points...
Johnson Company— Internal Controls Johnson Company Inc. (Johnson Company or the “Company”) is a U.S. public...
Johnson Company— Internal Controls Johnson Company Inc. (Johnson Company or the “Company”) is a U.S. public company that files quarterly and annual reports with the Securities and Exchange Commission (SEC). JOHNSON COMPANY is a leading retail chain operating more than 500 department stores across the continental United States. JOHNSON COMPANY department stores offer customers a variety of nationally advertised products, including cookware, shoes, jewelry, perfume, and other accessories. The Company’s supply chain of products is managed through a single warehouse...
Evaluating a potential client requires which of the following steps? Question 21 options: 1) Communicate with...
Evaluating a potential client requires which of the following steps? Question 21 options: 1) Communicate with the predecessor auditor. 2) Preplan the audit. 3) Establish the terms of the engagement. 4) None of these. Question 22 (3 points) What factor would most likely would cause a CPA not to accept a new audit engagement? Question 22 options: 1) the prospective client's unwillingness to permit inquiry of its legal counsel 2) the inability to review the predecessor auditor's documentation 3) the...
Review the Robatelli's Pizzeria Case Study. Develop another internal controls system, but this time, in the...
Review the Robatelli's Pizzeria Case Study. Develop another internal controls system, but this time, in the purchases and fixed assets business areas. Prepare a 12- to 16-slide presentation describing the purchases and fixed assets business areas. Be sure to incorporate speaker notes as well as appropriate visuals, graphics, fonts, etc. Include any associated risk in these areas. Describe specific internal controls that include authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and...
QUESTION 1 Which of the following factors would most likely lead a firm to adapt its...
QUESTION 1 Which of the following factors would most likely lead a firm to adapt its products for international markets? Exporting as the sole method of international marketing Similar levels of personal income Diverse consumer preference Economies of scale in production 2 points    QUESTION 2 Why would a firm research the marketing infrastructure of a foreign market prior to entry? To determine whether its prices will be competitive. Primarily to understand the role of the media including TV, print,...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT