A is corrent. Monitoring is one of the five interrelated components of internal control, not a factor of the control environment. The seven control environment factors are as follows: (1) integrity and ethical values, (2) commitment to competence, (3) human resource policies and practices, (4) assignment of authority and responsibility, (5) management’s philosophy and operating style, (6) board of directors or audit committee participation, and (7) organizational structure.
B is incorrect. Organizational structure is a factor of the control environment.
C is incorrect. Commitment to competence is a factor of the control environment.
D is incorrect. Board of directors or audit committee participation is a factor of the control environment.
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