The COSO Report Identified Five Interrelated Components of Internal Control

question 26

Multiple Choice

The COSO report identified five interrelated components of internal control. Since then, a sixth category has been identified, which is:

• A) monitoring.
• B) risk assessment.
• C) information and communication.
• D) control activities
• E) antifraud programs and controls

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Definitions:

Acquisition of Merchandise

The process of obtaining goods for sale, typically involving selection, ordering, and purchasing from suppliers.

Inventory Account

An inventory account is an account on the balance sheet that represents the value of unsold goods held by a company.

Perpetual Inventory System

A method of inventory management where updates to inventory records are made in real-time following every transaction.

Cost of Goods Sold

Cost of goods sold (COGS) represents the direct costs attributable to the production of the goods sold by a company.