Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

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What overall role do internal and external controls serve in a business?

Improving customer relations
Enhancing financial integrity and safeguarding assets
Facilitating employee training programs
Regulating workplace behavior

The correct answer is: Enhancing financial integrity and safeguarding assets

Internal and external controls play a crucial role in a business by enhancing financial integrity and safeguarding assets. These controls are designed to ensure that a company's financial reporting is accurate and complies with applicable laws and regulations. They help prevent fraud, errors, and mismanagement of resources by establishing checks and balances within the organization. Internal controls generally involve processes and procedures that a company implements internally to protect its assets and ensure the reliability of financial records. This might include segregation of duties, regular audits, and standardized procedures. External controls, on the other hand, could include regulations imposed by governmental bodies, the requirements of external auditors, and compliance standards that further ensure the integrity of financial reporting and operational practices. By effectively implementing these controls, businesses can instill trust among stakeholders, including investors, customers, and employees, as they demonstrate a commitment to ethical practices and transparency in financial operations. This foundation of financial integrity is vital for long-term sustainability and growth.