Which of the following describes the environment in internal control?
A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
B) The environment is the "tone at the top" of the business.
C) The environment is designed to ensure that the business earns profit.
D) A company must identify its risks.
B
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An employee of Nelson Manufacturing was injured by a defective machine Nelson purchased from Clark Corporation
The employee's tort action against Clark was successful. Clark, in turn, sued Nelson, alleging that Nelson failed to provide proper operating instructions to the employee. This claim (Clark vs. Nelson) is covered under Part Two of Nelson's workers compensation and employer liability policy. Such claims are called A) third-party over cases. B) absolute liability cases. C) joint-and-several liability cases. D) mass tort cases.
The Chester Company has issued 10%, nonparticipating, cumulative preferred stock with a total par value of $400,000 and common stock with a total par value of $800,000. No dividends are in arrears. How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $180,000 are distributed?
A) $80,000 to preferred and $100,000 to common B) $60,000 to preferred and $120,000 to common C) $55,000 to preferred and $125,000 to common D) $40,000 to preferred and $140,000 to common