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Unformatted text preview: Bear, Acct 425, Assignment 13-2 D1. Why is it important to consider both the costs and benefits of internal controls? It is important to consider both the costs and benefits of internal controls because it may be an ineffective cost to control every risk a company may take, therefore depending on the cost involved it may be efficient to only control significant risks. The key component in identifying and controlling risks in an organization is best dealt with so that the benefits of controlling the risks should exceed the costs of the controls or the risk would be useless. D2. Is risk 100 percent controllable? Explain your response. Risk which is any exposure to the chance of injury or loss is not 100% controllable but it can be minimized significantly or sometimes eliminated if the right steps and controls are followed. To better control risk organizations use internal controls which include many different activities that help detect and minimize any risks that can be foreseen but there is still always the chance for failure or profit loss. and minimize any risks that can be foreseen but there is still always the chance for failure or profit loss....
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This note was uploaded on 09/27/2010 for the course ACCT 425 taught by Professor Terawooten-tanner during the Summer '10 term at Franklin.
- Summer '10