Question

Which statement below describes the internal control procedure of insuring assets and bonding key employees? Insuring assets has a cost that outweighs the risk of loss. Insuring assets against casualty and bonding employees who handle cash, reduces risk of loss. Bonding employees and insuring assets increases the risk of loss. Insuring assets and bonding employees makes it unlikely that a theft is uncovered.

Answer 1

Answer:

Internal Control Procedure

Insuring assets and bonding key employees:

Insuring assets against casualty and bonding employees who handle cash, reduces risk of loss.

Explanation:

Insurance is a loss risk reduction strategy, employed by companies to insure their assets against the risk of loss.  Companies also bond "employees who handle cash" in order to reduce the risk of loss of cash.  The cost of insurance (premium) does not outweigh the risk of loss.  The monthly or annual premium is very insignificant when compared to the loss that could arise in the event of the issued risk materializing at any time.