E$4-3$ Below are several statements about internal controls.

Answer true$-$or$-$false questions about internal controls $($LO$4-2)$

The components of internal control are built on the foundation of the ethical tone set by top manement.

Once every three months, managers need to review operations to ensure that control procedures work effectively.

Collusion refers to the act of a single individual circumventing internal control procedures.

Fraud committed by top$-$level employees is more difficult to detect because those employees more often have the ability to override internal control features.

A good example of separation of duties would be having one person collect cash from customers and account for it$,$ while having another person order inventory and maintain control over it$.$

Employee tips historically have been the most common means of detecting employee fraud.

Effective internal controls and ethical employees ensure a company's success.