An effective control environment
A) Allows management to identify all relevant risks.
B) Creates a commitment to competence.
C) Guarantees that all controls are followed as prescribed.
D) Requires an internal audit function.

Question

Quizplus · Accepted Answer

An effective control environment creates a commitment to competence among employees and management, but it does not guarantee that all controls are followed as prescribed, nor does it necessarily require an internal audit function. While it is important for management to identify relevant risks, this is not the defining characteristic of an effective control environment.

An Effective Control Environment