The following are general questions about internal control. Choose the best response.
a. Which of the following would not be considered an inherent limitation of the potential effectiveness of an entity’s internal control structure?
(1) Incompatible duties
(2) Management override
(3) Mistakes in judgment
(4) Collusion among employees
b. Actions, policies, and procedures that reflect the overall attitude of management, directors, and owners of the entity about internal control relate to which of the following internal control components?
(1) Control environment
(2) Information and communication
(3) Risk assessment
(4) Monitoring
c. Vendor account reconciliations are performed by three clerks in the accounts payable department on Friday of each week. The accounts payable supervisor reviews the completed reconciliations the following Monday to ensure they have been completed. The work performed by the supervisor is an example of which COSO (Committee of Sponsoring Organizations of the Treadway Commission) component?
(1) Control activities
(2) Information and communication
(3) Risk assessment
(4) Monitoring