A Department Manager at TRS Corporation Attended a Seminar on Internal

question 72

Multiple Choice

A department manager at TRS Corporation attended a seminar on internal control; afterward, the manager formed a five-person departmental team to create an internal control plan for the department.After a one-day off-site meeting, the team produced a document titled "Departmental Internal Control Plan." It was formatted as a risk/control matrix.One member of the team commented that, although the work was interesting, the team was glad the task was complete and wouldn't have to be redone.Which element of COSO's internal control framework does the department's plan lack?

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

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Definitions:

Dual-Class Shares

Equity structures in which one class of shares offers more voting rights than another, typically to concentrate voting power with a certain group or founder.

Minority Shareholder

An investor who owns less than 50% of a company's shares and therefore does not have control over company decisions but may still enjoy rights such as receiving dividends.

DCF Stock Valuation Model

A method to estimate the value of a stock by using predicted cash flows and discounting them to present value.

Share of Stock

A unit of ownership in a company that entitles the holder to a proportion of the corporation's assets and profits.