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A division vice president fires project managers if they exceed 10 percent of their operating budget for their last three projects. This policy illustrates which component of internal control
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15 votes
15 votes
A division vice president fires project managers if they exceed 10 percent of their operating budget for their last three projects. This policy illustrates which component of internal control

User Nick Bisby
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1 Answer

17 votes
17 votes

Answer:

Control environment

Step-by-step explanation:

Internal control is defined as the process by which a company ensures operational efficiency, transparent financial reporting, and drive compliance with policies, laws and regulations of the company.

Control environment is a component of internal control, it is the series of actions that management of an organisation takes to guide the daily activities of their employees.

It includes actions taken to deal with issues around laid down policies and procedures.

In the given scenario the division vice president fires project managers if they exceed 10 percent of their operating budget for their last three projects.

This creates a control environment that is aimed at discouraging project managers from exceeding their budgets

User Stefan Breunig
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