The Principle of Selecting and Developing Controls That Might Help

question 80

Multiple Choice

The principle of selecting and developing controls that might help mitigate risks to an acceptable level belongs to which of the COSO's Internal Control Model's component?

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

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Definitions:

Capital Outlay

Expenditures for acquiring or upgrading physical assets such as equipment or property.

Average Rate of Return

A measure of the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Present Values

The current valuation of a future financial gain or series of payments, after applying a specific return rate.

Net Present Value Method

A valuation method that calculates an investment's worth by determining the present value of its expected future cash flows, subtracting the initial investment cost.