Which of the following is the most common means of managing risk in accounting?

• A. Implementing internal controls
• B. Delaying financial reporting
• C. Reducing employee salaries
• D. Increasing sales revenue

Answer: (A)

Verified step by step guidance

1. Understand the concept of risk management in accounting: Risk management involves identifying, assessing, and mitigating risks that could impact the accuracy and reliability of financial information.
2. Review the options provided in the question: Implementing internal controls, delaying financial reporting, reducing employee salaries, and increasing sales revenue.
3. Analyze each option: Internal controls are processes and procedures designed to ensure the integrity of financial reporting, compliance with laws and regulations, and prevention of fraud. Delaying financial reporting, reducing employee salaries, and increasing sales revenue do not directly address risk management in accounting.
4. Recognize that implementing internal controls is the most common and effective method for managing risk in accounting. Internal controls help detect and prevent errors, fraud, and misstatements in financial records.
5. Conclude that the correct answer is 'Implementing internal controls' because it directly aligns with the goal of managing risk in accounting practices.