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Discuss what is meant by the term "control environment" and identify four control environment subcomponents that the auditor should consider.
Organization-Level Incentive
A reward or bonus system designed to encourage and reward collective achievements of all members within an organization, aiming to drive overall organizational performance.
Profit Sharing
A company policy where employees receive a share of the company's profits beyond their regular pay, serving as an incentive and reward.
Gainsharing
A type of incentive plan where employees receive bonuses based on the cost-saving or performance improvements they help achieve for the company.
Merit Pay
A compensation strategy that links pay increases to performance appraisal ratings.
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