Accounting controls are designed to provide reasonable assurance that:

Question

Options

• Atransactions are excluded in accordance with management's general or specific authorization
• Btransactions are recorded as necessary to permit preparation of non-reliable financial statements
• Caccountability for assets is maintained
• DAll of the above

• A
  15% (5)
• B
  6% (2)
• C
  76% (25)
• D
  3% (1)

Explanation

Accounting controls aim to ensure that assets are properly tracked, safeguarded, and accounted for - so option C is correct because maintaining accountability for assets is a core objective of internal accounting controls, ensuring assets are only accessed per management authorization and that records accurately reflect what the organization owns.

Option A is wrong because it says transactions are excluded - the opposite of correct. Accounting controls require that authorized transactions are recorded, not excluded.

Option B is wrong because it contains a deliberate contradiction: controls exist to permit preparation of reliable financial statements, not "non-reliable" ones. Watch for answer choices that flip key words.

Option D ("All of the above") fails because A and B are both incorrect - it only takes one bad option to eliminate "all of the above."

Memory tip: Think of accounting controls as a GUARD: they ensure assets are Guarded, Unauthorized access is blocked, and records are Accurate and Reliable. If an answer choice contradicts reliability or proper recording, it's a trap.

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