Miguel and Rafaela Were Developing a Risk Management Plan for Their

question 21

Multiple Choice

Miguel and Rafaela were developing a risk management plan for their company following the COSO framework.One of the company's goals is to have sufficient cash available for operations; that goal had been difficult to achieve due to seasonal fluctuations in sales.To reduce that risk, Miguel and Rafaela recommended their company invest some cash in short-term securities that could be liquidated quickly and easily.Which element of the COSO framework is most related to their recommendation?

• A)Internal environment
• B)Monitoring
• C)Control activities
• D)Risk response

Understand the role of job analysis in developing effective performance management systems.

Recognize the importance of clear, measurable, and relevant performance standards.

Understand the benefits of regular and consistent performance feedback.

Know the legal implications of performance review practices.

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Definitions:

Direct Labor

The cost of workers who can be easily identified with the manufacturing process of a product.

Control

The process of gathering feedback to ensure that a plan is being properly executed or modified as circumstances change.

Budgets

Formal quantitative plans for the financial management of resources over a specified period, often used for controlling and directing resources.

Budgeted Income Statement

A financial report projecting revenue, expenses, and net income for a future period, based on management's expectations.