Which of the following suggests a weakness in the internal control environment?
A) the firm has an up-to-date organizational chart
B) monthly reports comparing actual performance to budget are distributed to managers
C) performance evaluations are prepared every three years
D) the audit committee meets quarterly with the external auditors

Question

Quizplus · Accepted Answer

Performance evaluations prepared every three years suggest a weakness in the internal control environment because they are not done frequently enough to provide timely feedback and identify potential issues in a timely manner. Effective internal control requires ongoing monitoring and evaluation to ensure that processes are functioning as intended and to identify and address any weaknesses or inefficiencies in a timely manner.

Which of the Following Suggests a Weakness in the Internal