The COSO Report Identified a Component of Internal Control as the Policies

question 54

Multiple Choice

The COSO report identified a component of internal control as the policies and procedures that help ensure that management directives are carried out and that management directives are achieved The component is:

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

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Definitions:

Agency Agreement

A legal contract creating a fiduciary relationship whereby the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements.

Gratuitous Basis

A voluntary action carried out without the expectation of payment or compensation.

Unconscionable

A term applied to a contract in which one party has so much more bargaining power than the other party that the powerful party dictates the terms of the agreement and eliminates the other party’s free will.

Constructive Trust

An equitable trust imposed on a person who wrongfully obtains or holds legal right to property he or she should not possess.