ITPEC IP October 2020 Question 64

Continuous evaluation of whether internal control works effectively — monitoring is the component of internal control that checks the other components.

Internal control is commonly described by six basic components: control environment, risk assessment and response, control activities, information and communication, monitoring, and response to IT. Monitoring is the ongoing process that evaluates whether internal control is functioning effectively, through day-to-day supervision within operations and independent evaluations such as internal audit, with deficiencies reported and corrected.

Answer (a)

Why not others:

• •(b) — compliance with laws and regulations is one of the objectives internal control serves, not the monitoring component
• •(c) — setting up the organization and responsibilities belongs to the control environment
• •(d) — identifying and analyzing risks that hinder objectives is risk assessment

Key rule: Risk assessment finds what could go wrong, control activities address it, and monitoring keeps evaluating that the controls still work.

System Audit · AI-written, may contain errors