Answer (B) is correct . According to AU 319, “Internal control is a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations.”
Answer (A) is incorrect because Safeguarding resources is subsumed under the overall purpose of providing reasonable assurance that the objectives of the organization are achieved.
Answer (C) is incorrect because Encouraging compliance with management’s intentions is subsumed under the overall purpose of providing reasonable assurance that the objectives of the organization are achieved.
Answer (D) is incorrect because Ensuring the accuracy, reliability, and timeliness of information is subsumed under the overall purpose of providing reasonable assurance that the objectives of the organization are achieved.
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