Understanding the Components of Internal Controls

What does the control environment of a company include?

• Employee personal goals

• The company's marketing strategies

• Management's attitude and organizational structure

• The company's product line

What is the primary focus of risk assessment in an organization?

• Developing new products

• Identifying potential for fraud and unmet business objectives

• Increasing market share

• Evaluating employee performance

Which of the following is an example of a control activity?

• Conducting market research

• Hiring new employees

• Launching a new advertising campaign

• Recording a transaction accurately

How does monitoring contribute to internal control?

• By increasing the company's revenue

• By expanding the company's market presence

• By ensuring control activities are happening and evaluating them periodically

• By reducing the number of employees

Why is information and communication important in an organization?

• To support internal control decisions with quality data

• To reduce the workload of employees

• To enhance the company's social media presence

• To increase the number of meetings