 In this presentation, we will take a look at multiple choice questions related to cash and internal controls. First question, which is not one of the goals of internal control system? A. Protect assets. All rights to specified assets. B. Reliable accounting. Accounting. I don't know anyone in accounting. Three. Adherence to policies. D. Return on investment or E. Efficient operations. So once again, we'll read the question, read through them, see if we can cross any out with the process of elimination. Question is, which is not one of the goals of internal control system? A. To protect assets. So the internal control system typically is going to achieve some objectives. We would think some of those would be positive objectives. Protecting assets, I would think that that would be one of the core type of things that we want to do with internal controls. So I'm going to say it's not that one. B. Says reliable accounting. Again, a reliable record keeping might be more what we would think. So I'm going to leave that for now, but I think that I mean, it sounds like a good goal. C. Adherence to policies. So an internal control wants to help us adhere to policies. I think that is an internal control system. So I'm going to say that's not it because that's true. D. Says return on investment. And that's a good thing, but I'm not sure that the internal control is really designed specifically for the return on investment. So I want to keep that for now. E. Says efficient operations. And I would think that internal controls would be a form of system that we're trying to put in place to have efficient operations. So I'm going to cross that out. So what's with B and D reliable accounting and return on investment. So once again, the question, which is not one of the goals of internal control system be reliable accounting or D return on investment. And those are these are both two things that a company wants, of course, but the internal controls I don't believe is specifically designed for the return on investment. Whereas reliable accounting, that's kind of our goals here. So the internal controls while return on investment is a goal of the company. And hopefully the internal controls don't take away from that. We typically are looking at the internal controls to do things like protect the assets, seize the assets, have reliable record keeping or accounting to adhere to policy and have have the efficient operations through the process, which may lead to return on investments. But that's not typically the specific goal of of the controls themselves. Next question. Internal control system a eliminates the company's risk of loss. B monitors company and employee performance. C eliminates human error. D eliminates the need for audits or E eliminates the need for managers. So we're going to read through this one more time and see that if we can cross things off with the process of elimination, internal control systems. Now if we think about internal control system, and we just get an idea of what they are in our head, then it might help us to go through these and cross off certain information. So they're going to help us to achieve certain goals. We want to safeguard the assets. We want comply with policies and procedures with our internal control system. And we want to make sure that we're in adherence with laws and regulations. And the internal control systems can help us to do that help us to make better record keeping processes. So if we go through these eliminate the company's risk of loss. Now this one is pretty interesting because it says when we say eliminate, that's that's pretty definitive of a statement. So I'm not sure any internal control could eliminate the risk of loss. So it might reduce the risk of loss. And that might be unreasonable, but the word eliminate, I think is really going to say now that's nothing is is off the table, typically with a loss could happen be monitors company and employee performance. That could be an internal control. So we'll keep that for now. See eliminate human errors. And again, I think that eliminate word is really a human error might reduce human errors greatly by having checks and balances and computer systems. So if it said reduce human errors, maybe that would probably be good. But no, not eliminate eliminates the need for audits. And again, it probably doesn't eliminate the need for audits. We might have a nicer audit if we if we have good internal controls. But I don't think so. And then eliminate the need for managers. Well, obviously the managers are going to be part of the internal control system. So I don't think they're going to be within the process not eliminating them. So I think clearly just that that word eliminates pretty much eliminates with four of the five choices. So I think B is going to be the answer here. Question and answer internal control system B monitors company and employee performance. Next question. If an internal control system is designed well, it a means we are not using a computer system be guarantees profitable operations. C eliminates the need for review. D requires the use of non computerized systems. And he reduces the company's risk of loss. I'm going to read through this one more time, see if we can eliminate some of the awesome options with the process of elimination. If an internal control system is designed well, it a means we are not using a computerized system. So an internal control system may, you know, not use a computerized system, but computerized system could be used as well within the control system and could benefit greatly to it. So I don't think it's that be guarantees profitable operations. And again, that really definitive word of guaranteeing profits is not it's not really the objective internal control to guarantee profits. It's not even the really the objective to increase profits likely. It's really to safeguard the assets and safeguard against losses. Oftentimes, it's probably going to be helpful for long term profits, but that's not really the specific objective of the internal controls. Really, the internal controls are really to improve the operations and monitor the processes which could increase assets, but it's no guarantee. C says eliminates the need for review. And again, a review process within internal controls is probably going to be part of the internal controls and an external review would not be necessary eliminated from from good internal control. So again, that eliminates word is probably dequalifying that D requires the use of non computerized systems. So again, internal controls doesn't mean we're not using a computer that we might have less of a paper trail with computers, but we can adjust for that in some other ways. So that's not it. So E by the process of elimination seems like it's got to be it and it says reduces the company's risk of loss. Now let's so let's read that one more time. If an internal control system is designed well, it E reduces the company's risk of loss. Now note that if we just changed this word to eliminate the company's risk of loss, it would not be correct. But reducing the risk of loss could be an objective, especially if we're trying to safeguard ourselves and against assets being stolen or fraud that could certainly reduce the risk of loss. That's one of the objectives of the internal control system.