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How do internal controls contribute to compliance with regulations? * By disregarding legal and regulatory risks. By minimizing adherence to relevant laws and regulations. By establishing processes to ensure compliance. By isolating from external regulations. Answer Key: What is the primary purpose of internal control within an organization? * Enhancing shareholder profits Providing absolute assurance Safeguarding financial information and assets Eliminating all risks Which framework is widely acknowledged for defining internal control principles? Financial Reporting Standards (FRS) Committee of Sponsoring Organizations of the Treadway Commission (COSC International Financial Reporting Standards (IFRS) Securities and Exchange Commission (SEC) What are the five key components identified by the coso framework for internal control? Control, Risk, Monitoring, Reporting, Compliance Control Environment, Risk Assessment, Control Activities, Information and Communication, Monitoring Activities Segregation, Authorization, Compliance, Efficiency, Reporting Risk Management, Financial Reporting, Compliance, Efficiency, Monitoring Which aspect is NOT covered by the significance of internal control? * Operational Efficiency Fraud Prevention Maximizing Shareholder Returns Financial Reporting Accuracy What role does risk assessment play in internal control? * It ignores potential risks. It minimizes the need for control activities. It informs the design of effective internal controls. It eliminates all risks within an organization. How do strong internal controls contribute to fraud prevention? * By allowing unrestricted access to financial data. By ensuring segregation of duties and regular reconciliations. By reducing communication within the organization. By overlooking authorization procedures. Why is the control environment considered crucial in internal control systems? It dictates absolute control over all operations. It influences the consciousness of individuals toward control. It establishes financial reporting standards. It eliminates all risks within an organization. Share your feedback about the class as a whole (such as topics covered, instructions, course requirement, mode of learning, etc.)