91Ó°ÊÓ

Review each alternative and assess its relevance to the internal control over assets. A key aspect of internal control is segregation of duties. This separation makes fraud more difficult and likelihood of errors detection more probable.\n 'a' Segregate authorization, and execution can reduce the likelihood of fraud and errors.\n 'b' Segregate authorization and review might make detection of errors more likely, however, it doesn't specifically indicate a control over assets.\n 'c' Segregate custody and record keeping directly associates with controlling over assets. Segregation between those managing the assets(custody) and those keeping record of them minimizes the likely of both fraud and errors.\n 'd' Segregate custody and payment might also reduce the likelihood of fraud, but it doesn't indicate a control over company assets directly.\n Based on these assessments, the best answer is option c: Segregate custody and record keeping.

Review each statement to verify if it correctly articulates the internal control concept.\n 'a' Internal control does not ensure that collusion will be detected. This statement is true. Despite having internal control, collusion of internal personal can bypass it and might remain undetected.\n 'b' Internal control design is the responsibility of the outside auditors. This statement is incorrect. Internal control systems are designed and maintained by the company’s internal management, not outside auditors.\n 'c' The costs of internal control often exceed the benefits. This statement may not be true as it is the benefits that often justify the cost of internal control.\n 'd' A strong system of internal control should be enough to show that the financial statements 'present fairly'. This statement is false as internal control is only one aspect of fair presentation of financial statements, and won't be sufficient alone.\n Of these - option 'a' is the correct statement: Internal control does not ensure that collusion will be detected.