Assignment 3-2 100% correct standard work A+
6-1 What are management's incentives for establishing and maintaining strong internal control? What are the auditor's main concerns with internal control? Management's incentives for establishing and maintaining strong internal control are that the information needs to be safeguarded and the information system needs to generate reliable information for decision making. If the information is unreliable then management may not be able to make informed decisions on product pricing, cost of production, and profit information. Also, external reports may not be of good use for investors or other stakeholders. The auditor's main concerns with internal controls are if the assets and records of the entity are safeguarded and if the data generated is reliable. 6-3 Describe the five components of internal control.
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