Directions: Choose the correct option for the given question.

Which of the following statements is/are correct?

1. Internal control includes quality control.
2. Internal control is compulsory for all forms of business organizations.
3. Internal control helps external auditor to design suitable audit programme for client's organization.

Statement 1 is correct - internal control systems encompass quality controls as part of comprehensive control frameworks. Statement 2 is incorrect - internal control is not compulsory for all forms of business organizations; it's recommended but not mandated for every business type. Statement 3 is correct - understanding a client's internal control system helps external auditors design appropriate audit programs by determining control reliance and substantive testing requirements.