Which of the following is NOT the interrelated component of internal control?
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A. B. C. D.D
Internal control is a process designed to provide reasonable assurance regarding the achievement of an organization's objectives. It is composed of five interrelated components, which work together to effectively manage an organization's risks and safeguard its assets. The five components of internal control are:
Control Environment - The control environment sets the tone of an organization, influencing the control consciousness of its people. It is the foundation for all other components of internal control and includes factors such as integrity and ethical values, management's philosophy and operating style, the organization's structure, and its commitment to competence.
Risk Assessment - Risk assessment is the identification and analysis of relevant risks to the achievement of an organization's objectives. It involves considering both internal and external factors that may affect an organization's ability to achieve its goals.
Control Activities - Control activities are the policies, procedures, and other mechanisms that are implemented to help ensure that management's directives are carried out. They include activities such as approvals, authorizations, verifications, reconciliations, and segregation of duties.
Information and Communication - Information and communication provide the necessary context for effective internal control. They include the systems, processes, and procedures used to identify, capture, and exchange information in a timely and reliable manner.
Monitoring - Monitoring involves assessing the effectiveness of an organization's internal control over time. It includes ongoing and separate evaluations, as well as reporting deficiencies and recommendations for improvement.
Out of the given options, "Planning control" is not one of the interrelated components of internal control. While planning is an important aspect of internal control, it is not considered a separate component. Planning activities are typically incorporated within the other components of internal control, such as risk assessment and control activities. Therefore, the correct answer is option D, "Planning control."