Management's commitment to integrity and ethical values, and active oversight by the board, are examples of which component of internal control?
Answer and explanation
Correct answer: C. The control environment
- Step 1: The five components are control environment, risk assessment, control activities, information and communication, and monitoring.
- Step 2: The tone set by management and the board forms the control environment.
Answer
The control environment.
Why not the others: Control activities are policies such as authorisation and reconciliation. Monitoring is the ongoing review of whether controls work. Risk assessment identifies and analyses risks to objectives.
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