Question

Controls are not designed to provide assurance that:A. Transactions are executed in accordance with management's authorization.B. Fraud will be eliminated.C. Access to assets is permitted only in accordance with management's authorization.D. The recorded accountability for assets is compared with the existing assets at reasonable intervals.

Answer 1

B. Fraud will be eliminated.

Step-by-step explanation:

Controls when established provides the quality of assurance that the procedures are followed properly, regarding each and every accounting transactions.

There is an inbuilt rate of fraud in any business, which is unavoidable irrespective of any controls established.

Thus, controls do not assure elimination of fraud, but yes the effective implementation of control makes the fraud difficult to occur, as the controls set a standard procedure of doing an act.

This is basically because the controls establish the strict rules to be followed while accounting for transactions which states the clear picture of fair practice of accounting.