Day: November 3, 2025

Accounting Multiple Choice Question – 3 November 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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ISA (UK) 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding of the Entity and Its Environment states that an internal control system in an organisation consists of five components:

  • the control environment
  • the entity’s risk assessment process
  • the information system
  • controls activities
  • monitoring of controls

For the following example, select the component which it illustrates.

– The process of preparing the financial statements

Select ONE answer:

  1. Information system
  2. Controls activities
  3. Control environment
  4. Monitoring of controls

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct => The process of preparing the financial statements forms part of the information processing system. Note – the control environment refers to the management style and philosophy towards controls.
  2. Not correct
  3. Not correct
  4. Not correct

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