Final answer:
Monitoring Activities is the COSO component requiring periodic reviews to assess and update the quality of an organization's internal control performance. It uses evaluations, feedback, audits, and other tools to effectively monitor internal controls and address deficiencies.
Step-by-step explanation:
The Component of COSO that requires period reviews and updates to determine the quality of internal control performance is referred to as Monitoring Activities. This involves ongoing or separate evaluations to ensure that each component of internal control, including all its aspects, continues to function over time. Regular reviews help in identifying and addressing any deficiencies and ensuring that any changes that affect the internal controls are reflected in the updated controls.
As part of the monitoring activities, organisations may use various forms of feedback mechanisms, audits, and other assessment tools to evaluate the effectiveness of internal controls. Organisations are encouraged to use relevant information from both internal and external sources to inform their monitoring activities. This proactive approach ensures that the system of internal control remains robust and capable of managing the risks an organisation faces.