The control environment does not
A) set the tone of an entity.
B) set the foundation for all other components of internal control.
C) refer to the policies and procedures that help make sure management's directives are carried out.
D) influence the control consciousness of employees.

Question

Quizplus · Accepted Answer

The control environment refers to the overall attitude and actions of an organization towards internal control, ethical values, and compliance. It includes various factors such as management's integrity and ethical values, structure of the organization, assignment of authority and responsibility, human resource policies, and overall culture of the organization. It does not specifically refer to the policies and procedures that help make sure management's directives are carried out (choice C). However, the control environment does set the tone of an entity (choice A), set the foundation for all other components of internal control (choice B), and influence the control consciousness of employees (choice D).

The Control Environment Does Not