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An Entity's Internal Controls Consist of Five Interrelated Components (Plus

Question 14

Matching

An entity's internal controls consist of five interrelated components (plus an overriding concern with fraud prevention and detection), identify the component to which each of the following control activities or considerations pertains.

Premises:

Responses:

Performance reviews

control environment

Commitment to competence

risk assessment

System should provide a complete audit or transaction trail

information and communication

Integrity and ethical values

control activities

Access controls

monitoring

Changes in operating environment

Board of directors and audit committee

Segregation of duties

Organizational structure

Reporting exceptions for follow-up

Management’s philosophy and operating style

Internal audit function

Physical controls

New accounting pronouncements

Assignment of authority and responsibility

Human resource policies and procedures

Organization and operation control

Input controls

Data and procedural controls

Processing controls

Premises:

Performance reviews

Commitment to competence

System should provide a complete audit or transaction trail

Integrity and ethical values

Access controls

Changes in operating environment

Board of directors and audit committee

Segregation of duties

Organizational structure

Reporting exceptions for follow-up

Management’s philosophy and operating style

Internal audit function

Physical controls

New accounting pronouncements

Assignment of authority and responsibility

Human resource policies and procedures

Organization and operation control

Input controls

Data and procedural controls

Processing controls

Responses:

control environment

risk assessment

information and communication

control activities

monitoring

Correct Answer:

Premises:

Responses:

Performance reviews

Commitment to competence

System should provide a complete audit or transaction trail

Integrity and ethical values

Access controls

Changes in operating environment

Board of directors and audit committee

Segregation of duties

Organizational structure

Reporting exceptions for follow-up

Management’s philosophy and operating style

Internal audit function

Physical controls

New accounting pronouncements

Assignment of authority and responsibility

Human resource policies and procedures

Organization and operation control

Input controls

Data and procedural controls

Processing controls