Question

Which of the following is an example of an internal control?

1) Regularly reconciling bank statements
2) Maintaining a clean and organized work environment
3) Implementing a password policy for computer systems
4) Providing training to employees on company policies and procedures

Answer 1

Implementing a password policy for computer systems is an example of an internal control. Providing training to employees on company policies and procedures is a way to promote compliance and adherence to internal controls, but it is not an internal control in itself.

Step-by-step explanation:

An example of an internal control is implementing a password policy for computer systems. This control ensures that only authorized individuals can access sensitive information, reducing the risk of unauthorized access or data breaches. Regularly reconciling bank statements is a good practice for financial control, but it is not an internal control since it typically involves external parties, such as a bank.

Maintaining a clean and organized work environment is important for productivity and efficiency, but it is not specifically categorized as an internal control. Providing training to employees on company policies and procedures is a way to promote compliance and adherence to internal controls, but it is not an internal control in itself.