Which types of assets require internal controls?

The correct choice identifies various types of assets that necessitate internal controls to ensure accurate financial reporting, safeguarding assets, and preventing fraud or mismanagement. Cash or cash equivalents are particularly susceptible to theft and misappropriation, making stringent controls essential. Fixed assets require tracking and fraud prevention measures since they often represent significant investments for an organization. Resale merchandise and consumable supplies need oversight to ensure proper inventory management, accurate valuation, and to prevent loss through theft or inefficiency. Securities, like investments, must also have controls in place to monitor performance and adherence to investment policies.

Other choices presented encompass certain asset classifications but fail to recognize the comprehensive nature of controlling all asset types. Internal controls are critical across a broad spectrum of asset types, not just limited to cash equivalents or fixed assets. The notion that internal controls are unnecessary for any assets overlooks the fundamental principles of sound financial management, as all assets require some level of oversight to maintain integrity and value.