Which of the Following Is Not One of the Underlying

question 43

Multiple Choice

Which of the following is not one of the underlying principles of an effective control environment as developed by COSO?

• A)The organization demonstrates a commitment to integrity and ethical values.
• B)The board of directors demonstrates independence from management and exercises oversight for the development and performance of internal control.
• C)Management establishes,with board oversight,structures,reporting lines,and appropriate authorities and responsibilities in pursuit of objectives.
• D)The organization considers the potential for fraud in assessing risks to the achievement of objectives.

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Definitions:

Actual Notice

Directly being informed about something or being aware of a fact or situation.

Constructive Notice

A legal concept that assumes a person is aware of facts, notices, or documents even if they are not physically present, often used in property law to signify recorded documents.

Agency Coupled With Interest

An agency coupled with an interest is a situation in which an agent has been given rights or property interest in the subject matter of the agency, making the agency irrevocable for a specified period.

Agency Relationship

A legal relationship where one party (the agent) acts on behalf of another party (the principal), with the authority to create legal obligations.