Question

COSO's Internal Control Framework consists of five internal control components and 17 principles for achieving effective internal control. Which of the following is/are principle(s)?

1) I. The organization demonstrates a commitment to integrity and ethical values.
2) II. The organization establishes and maintains an organizational structure, including assignment of authority and responsibility, to support the achievement of the entity's objectives.
3) III. The organization demonstrates a commitment to attract, develop, and retain competent individuals in alignment with objectives.
4) IV. The organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives.
5) V. The organization selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning.

Answer 1

All the options (I-V) provided are part of the 17 principles in COSO's Internal Control Framework, which aim to help organizations implement effective internal control systems.

Step-by-step explanation:

Within COSO's Internal Control Framework, the five components are crucial for achieving effective internal control and these components are supported by 17 underlying principles. The principles represent fundamental concepts associated with each component that organizations should apply to establish an effective system of internal control. The options provided (I-V) are indeed all part of the 17 principles enumerated by COSO, which guide organizations on how to manage and implement effective internal control measures.

• I. The organization demonstrates a commitment to integrity and ethical values.
• II. The organization establishes and maintains an organizational structure, including assignment of authority and responsibility, to support the achievement of the entity's objectives.
• III. The organization demonstrates a commitment to attract, develop, and retain competent individuals in alignment with objectives.
• IV. The organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives.
• V. The organization selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning.