D is corrent. Auditing Standards divide internal control into five interrelated components as follows: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring.
A is incorrect. The control objectives are (1) reliability of financial reporting, (2) effectiveness and efficiency of operations, and (3) compliance with applicable laws and regulations.
B is incorrect. The control environment elements set the tone of an organization, influencing the control consciousness of its people.
C is incorrect. Information and communication consists of the methods and records established to record, process, summarize and report entity transactions and to maintain accountability of the related assets and liabilities.
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