Multiple Choice
An internal control system is used to do all of the following EXCEPT:
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6. Internal Controls and Reporting Cash
Five Components of Internal Controls
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is NOT one of the five components of internal control as defined by COSO?
A
Information and Communication
B
Financial Reporting
C
Control Environment
D
Risk Assessment
Verified step by step guidance1
Understand the COSO framework: COSO (Committee of Sponsoring Organizations of the Treadway Commission) defines internal control as a process designed to provide reasonable assurance regarding the achievement of objectives in operations, reporting, and compliance. It identifies five key components of internal control.
Review the five components of internal control as defined by COSO: These are Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities.
Analyze the options provided in the question: Compare each option to the five components of internal control defined by COSO.
Identify the option that does not match any of the five components: 'Financial Reporting' is not one of the five components of internal control, although it is related to the objectives of internal control.
Conclude that the correct answer is 'Financial Reporting' because it is not part of the five components of internal control as defined by COSO.
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