Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

Financial Accounting

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

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Multiple Choice

Which of the following is one of the five components of internal controls as defined by COSO?

Foreign Key Management

Inventory Valuation

Control Environment

Financial Statement Preparation

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Verified step by step guidance

Understand the context of the question: The problem is asking about the five components of internal controls as defined by COSO (Committee of Sponsoring Organizations of the Treadway Commission). Internal controls are processes designed to ensure the reliability of financial reporting, compliance with laws and regulations, and the effectiveness and efficiency of operations.

Learn the five components of internal controls according to COSO: These are Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities. Each component plays a critical role in establishing a robust internal control system.

Focus on the term 'Control Environment': The Control Environment is the foundation of the internal control system. It includes the organization's ethical values, integrity, governance structure, and the tone set by management. It influences the overall attitude and awareness of internal controls within the organization.

Eliminate incorrect options: Foreign Key Management and Inventory Valuation are not components of internal controls as defined by COSO. These terms are related to database management and inventory accounting, respectively. Financial Statement Preparation is also not a COSO component; it is an outcome of effective internal controls.

Confirm the correct answer: Based on the COSO framework, the correct answer is 'Control Environment,' as it is one of the five components of internal controls.