The Control Environment Component of Internal Control Was Identified to Have

question 40

Multiple Choice

The control environment component of internal control was identified to have a number of different factors.Which of the following is NOT one of those factors?

• A)Management's oversight responsibility, including its philosophy and operating style
• B)The identification of sources of risk
• C)The integrity and ethical values of the entity's people
• D)The board of directors demonstrates independence from management and exercises oversight of internal controls.

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Definitions:

Diminishing Marginal Utility

The principle that the satisfaction or utility gained from consuming each additional unit of a good or service decreases as more of it is consumed over a certain period.

Indifference Curves

Indifference curves are graphs showing different combinations of two goods that provide equal satisfaction and utility to a consumer.

Budget Constraint

The cap on the combinations of goods a consumer is able to purchase, determined by their earnings and the cost of those items.

Utility

A measure of satisfaction or happiness that consumers derive from consuming goods and services.