Accounting Information Systems (13th Edition)
13th Edition
ISBN: 9780133428537
Author: Marshall B. Romney, Paul J. Steinbart
Publisher: PEARSON
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Chapter 7, Problem 1CQ
To determine
Determine among the given options, that is not an element of internal control as per COSO.
Expert Solution & Answer
Answer to Problem 1CQ
Option b
Explanation of Solution
Internal controls are the controls established within an organization to check errors and frauds within an organization. Establishment and maintenance of internal controls is responsibility of the management.
COSO stands for Committee of Sponsoring Organizations. The five internal control components of COSO are listed as follows:
- Control environment: Establishment of awareness for controls.
- Risk assessment: Assessment of risk for establishment of controls.
- Information and communication: Appropriate communication of the control activities and policies should be maintained.
- Monitoring: Operating effectiveness of the control procedures should be monitored within the organization.
- Control activities: Control activities are the activities undertaken to address risks identified within the organization.
Justification: Risk assessment, monitoring, and information and communication are elements of internal control. Whereas, internal control policies are not a component of internal control formulated by Committee of Sponsoring Organizations (COSO). Control environment and control procedures are components of internal control framework. Hence, the correct answer is option b.
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Chapter 7 Solutions
Accounting Information Systems (13th Edition)
Ch. 7 - Prob. 1CQCh. 7 - In the ERM model, COSO specified four types of...Ch. 7 - Prob. 3CQCh. 7 - Prob. 4CQCh. 7 - Prob. 5CQCh. 7 - Prob. 6CQCh. 7 - Prob. 7CQCh. 7 - Which of the following is a control procedure...Ch. 7 - Prob. 9CQCh. 7 - Prob. 10CQ
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 11PCh. 7 - PriceRight Electronics (PEI) is a small wholesale...
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