Question

name and describe the five elements of internal control. Is any one element more important than the other?

Answer 1

5 elements of internal control are as follows :

1.Control environment:It is the foundation on which an effective system of internal control is built. It is a set of standards, processes and structures that acts as the basis for carrying out internal control across the organization

2.Risk assessment:It is the evaluation of various risks associated with the business, including competitive threats, regulatory changes and changes in economic factors.

3.Control procedures:These are policies and procedures which are established to provide reasonable assurance towards the achievement of business goals and targets.

4.Monitoring :Evaluates internal control system and reports deficiencies if any.It ensures that control activities and other planned actions to effect internal control are carried out properly and in a timely manner.

5. Information and communication:It is the means by which information is disseminated throughout the organization, flowing up, down, and across the entity.In simple sense, it provides mngmnt with feedback about internal control.

No. Each element of internal control is as important as the other. For an effective internal control all 5 elements are inevitable.