Which of the Following Is Not One of the Underlying

question 43

Multiple Choice

Which of the following is not one of the underlying principles of an effective control environment as developed by COSO?

• A)The organization demonstrates a commitment to integrity and ethical values.
• B)The board of directors demonstrates independence from management and exercises oversight for the development and performance of internal control.
• C)Management establishes,with board oversight,structures,reporting lines,and appropriate authorities and responsibilities in pursuit of objectives.
• D)The organization considers the potential for fraud in assessing risks to the achievement of objectives.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest held by stockholders.

Common Stock

A type of corporate equity security that represents a share of ownership in a corporation, conferring voting rights and a portion of the profits (dividends).

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing shareholders' equity.