d Stockholders I5 Statement evaluation Indicate whether each

d. Stockholders. I5. Statement evaluation. Indicate whether each of the following statements is (i) always true, (ii) sometimes true, or (ii) never true. For those that are (ii) sometimes true, explain when the statement is true. a. Audits are less time consuming and less expensive in organizations with strong internal control systems. b. Document matching concepts can be applied to purchases of and payments for office supplies. c. In companies with strong internal control, only one person has the authority to sign checks. d. In the COSO Internal Control framework, control activities can be preventive, detective, or corrective. e. Information technology eliminates the need for internal control systems. f. Internal controls prevent fraud. g. Liquidity risk is more inportant than other types of risk. h. Preventive controls are more expensive than detective or corrective controls. i. Properly implemented lockbox systems eliminate the need for bank reconciliations. j. Reported weaknesses in internal control will lead to reductions in stock prices.

Solution

a - some times true. Even though the internal controls are strong the auditor should ensure that they are stong by himself and it is time consuming sometimes

b - always true

c - some times true. in some cases internal controls may be stong even there is single authority but in general for strong internal controls the the authority should be assigned to more than one person

d - always true

e - never true

f - somes times true. weak internal controls may not prevent fraud

g - some times true. It is important when the party is holding or about to hold any asset for trading

h - some times true

i - never true

j - some times true. stock prices may be affected by many factors and internal controls could be one amony them