CS Professional · Internal and Forensic Audit · Internal Controls
At Bharat Textiles Ltd, the board has adopted a code of conduct, the audit committee meets regularly, and the CEO personally reviews ethics breaches. The internal auditor concludes that these features primarily reflect which COSO component?
These features reflect the control environment. A code of conduct, board and audit committee oversight and top management's commitment to ethics set the tone at the top and are the foundation for internal control. Control activities are specific procedures such as approvals, so they do not fit.
- AControl activities
- BControl environmentCorrect
- CMonitoring activities
- DRisk assessment
Explanation
Integrity and ethical values, board oversight and management's tone at the top are principles of the control environment, the foundation of the other components. Control activities are specific policies and procedures such as approvals and reconciliations, so that option is wrong.
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