Answer (B) is correct . Internal control is a process designed to provide reasonable assurance regarding the achievement of organizational objectives. Because of inherent limitations, however, no system can be designed to eliminate all fraud.
Answer (A) is incorrect because Internal control can provide reasonable assurance regarding reliability of financial reporting.
Answer (C) is incorrect because Internal control can provide reasonable assurance regarding compliance with applicable laws and regulations.
Answer (D) is incorrect because Internal control can provide reasonable assurance regarding effectiveness and efficiency of operations.
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