Internal Control Components

The most widely accepted internal control framework in the United States contains the following five components.

$1.$The

control activitiescontrol environmentinformation and communication systemmonitoring processesrisk assessment

is the policies, procedures, and attitudes of the top management and owners of the business.

$2.$

Control activitiesControl environmentInformation and communication systemMonitoring processesRisk assessment

is management$$s process for identifying, analyzing, and responding to its business risks.

$3.$

Control activitiesControl environmentInformation and communication systemMonitoring processesRisk assessment

are the policies and procedures established to help management meet its control objectives.

$4.$

Control activitiesControl environmentInformation and communication systemMonitoring processesRisk assessment

is the set of procedures, processes, and records established to initiate, process, record, and report the business$$s transactions.

$5.$

Control activitiesControl environmentInformation and communication systemMonitoring processesRisk assessment

are the methods used by management to determine that controls are operating properly, and that the controls are modified in response to changes in assessed risks.