A Department Manager at TRS Corporation Attended a Seminar on Internal

question 72

Multiple Choice

A department manager at TRS Corporation attended a seminar on internal control; afterward, the manager formed a five-person departmental team to create an internal control plan for the department.After a one-day off-site meeting, the team produced a document titled "Departmental Internal Control Plan." It was formatted as a risk/control matrix.One member of the team commented that, although the work was interesting, the team was glad the task was complete and wouldn't have to be redone.Which element of COSO's internal control framework does the department's plan lack?

• A)Risk assessment
• B)Control activities
• C)Information and communication
• D)Monitoring

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Definitions:

Net Operating Income

A measure of a company's profitability from regular business operations, excluding deductions of interest and taxes.

Payback Period

The time required for an investment to generate cash flows sufficient to recover the initial investment cost.

Scrap Value

The estimated resale value of an asset at the end of its useful life, also known as salvage value.

Incremental Annual

Incremental annual refers to the year-over-year changes or additional amounts in revenue, cost, or other financial metrics.