Which of the following describes the standards companies must adhere to remain operational?

The concept of external controls refers to the frameworks and systems put in place to ensure that a company operates according to established standards and regulations. These controls come from outside the company and may involve stakeholders, regulatory agencies, and industry groups that mandate compliance with certain operational standards.

While external controls are essential for maintaining operational integrity, the more accurate term that encompasses the full breadth of standards companies must adhere to is regulatory compliance measures. Regulatory compliance measures specifically involve rules and regulations set by governing bodies that enforce adherence to industry laws, safety protocols, and financial reporting standards. This ensures not only operational effectiveness but also accountability and transparency to stakeholders.

Understanding the nuances of these different terms can clarify the distinction between general guidelines, such as corporate governance and industry best practices, and the obligatory nature of compliance measures that companies must follow to ensure they remain operational legally and ethically.