Which of the following indicates a strong internal control environment?
A) the internal audit group reports to the audit committee of the board of directors
B) there is no segregation of duties between organization functions
C) there are questions about the integrity of management
D) adverse business conditions exist in the industry

Question

Quizplus · Accepted Answer

The internal audit group reporting to the audit committee of the board of directors indicates a strong control environment because it shows that there is independent oversight of the company's internal controls.

Answer: None of the other choices provide indicators of a strong internal control environment. B indicates a weak control environment, C questions the integrity of management, which is a key aspect of strong internal controls, and D suggests that adverse business conditions may inhibit the development and maintenance of a strong internal control environment.

Which of the Following Indicates a Strong Internal Control Environment