PSMS 2024 - Exercise 1.2

Function refers to the program, project, activity, and processes in the government activity.

• True

• False

Operating Unit is a level of an agency structure that refers to any major functional unit, within the framework of a government agency, where functions are defined by law or regulation.

• True

• False

For internal control to be effective, it has to be cost-effective; function consistently according to plan throughout the period; comprehensive, reasonable, and directly related to the control objective; and ___________.

• Appropriate

• Reconciled

• Verified

• Reviewed

How many interrelated components does internal control have?

• 6

• 4

• 5

• 7

Documentation involves preserving evidence to substantiate a decision, event, transaction, or system.

• True

• False

________ sets the tone of an agency, influencing the control consciousness of its staff. It is the foundation for all the other components of internal control, providing discipline and structure.

• Control environment

• Control activities

• Risk assessment

• Monitoring

One of the principles of internal control activities is that management should consider human capital as an asset rather than costs.

• True

• False

The policies and procedures established to address risks and to achieve the agency’s objectives.

• Control environment

• Control activities

• Risk assessment

• Monitoring

Risk assessment is the process of identifying and analyzing relevant risks to the achievement of the agency’s objectives, and determining the appropriate response to the risks.

• True

• False

A component of internal control that deals with a process that assesses the quality of the internal control system’s performance over time.

• Monitoring

• Control activities

• Control environment

• Information and communication