Corporate Governance - Entity-Level Controls - Tone at the Top: Establishing Control Environment

Question 1

Control environment

Answer 1

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

Question 2

Risk assessment

Answer 2

is the entity’s identification and analysis of relevant risks to achievement of its objectives, forming a basis for determining how the risks should be managed.

Question 3

Control activities

Answer 3

are the policies and procedures that help ensure that management directives are carried out.

Question 4

Information and communication

Answer 4

are the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities.

Question 5

Monitoring activities

Answer 5

is a process that assesses the quality of internal control performance over time.