Question

Which of the following is not a component of internal control?

1) Risk assessment
2) Monitoring activities
3) Segregation of duties
4) Financial reporting

Answer 1

The correct answer is 4) Financial reporting.

Step-by-step explanation:

The correct answer is 4) Financial reporting.

Internal control refers to the policies and procedures implemented by a company to safeguard its assets, ensure the accuracy and reliability of financial information, and promote operational efficiency. It consists of several components, including:

• Risk assessment: This involves identifying and assessing the risks that could impact the achievement of the organization's objectives.
• Monitoring activities: This involves ongoing monitoring of internal control systems to ensure they are functioning effectively and addressing identified risks.
• Segregation of duties: This involves separating key duties and responsibilities among different individuals to mitigate the risk of fraud or error.
• Financial reporting: Although financial reporting is an important aspect of internal control, it is not considered a separate component. Instead, it is integrated throughout the other components of internal control as financial information flows through the organization's systems and processes.