Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?
A.
The department managed long-term investments, including investment in derivatives and other financial instruments, to maximize return.
B.
The department manager sets a tone of honesty and integrity in all business dealings and this tone is emulated by department personnel.
C.
Many department functions were duplicated or verified by other department employees as part of the department's normal procedures.
D.
Audit tests designed to verify compliance with control procedures detected a general failure to follow standard procedures for transaction authorization.
Control environment : "The attitude and actions of the board and management regarding the importance of control within the organization.
The control environment provides the discipline and structure for the achievement of the primary objectives of the system of internal control. The control environment includes the following elements :
- Integrity and ethical values,
- Organizational structure,
- Management's philosophy and operating style,
- Assignment of authority and responsibility,
- Human resource policies and practices,
- and competence of personnel.".
In the first answer, maximizing return on investment is a normal operation that does not have a significant impact on an assessment of a department's control environment.
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John1237
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