There are five interrelated components that comprise internal control. They are: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Monitoring is an activity of management. Monitoring assesses the quality of the internal control system's performance over time. Monitoring can be done in two ways: (1) through ongoing monitoring during normal operations, and (2) separate evaluations by management with the assistance of the internal audit function. If monitoring is done regularly during normal operations, it lessens the need for separate evaluations. The manager's reconciliation of cash received with food orders entered is a control activity. A reconciliation is a detective control activity, because it is intended to detect the occurrence of an unwanted event. However, it does not represent a monitoring activity of management.
There are five interrelated components that comprise internal control. They are: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Monitoring is an activity of management. Monitoring assesses the quality of the internal control system's performance over time. Monitoring can be done in two ways: (1) through ongoing monitoring during normal operations, and (2) separate evaluations by management with the assistance of the internal audit function. If monitoring is done regularly during normal operations, it lessens the need for separate evaluations. Daily transmission of cash to corporate headquarters is a control activity which serves as an operational control.
There are five interrelated components that comprise internal control. They are: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Monitoring is an activity of management. Monitoring assesses the quality of the internal control system's performance over time. Monitoring can be done in two ways: (1) through ongoing monitoring during normal operations, and (2) separate evaluations by management with the assistance of the internal audit function. If monitoring is done regularly during normal operations, it lessens the need for separate evaluations. Segregation of duties is a control activity which serves as a preventive control, because it is intended to prevent the occurrence of an unwanted event. Therefore, it does not represent a monitoring activity of management.
There are five interrelated components that comprise internal control. They are: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Monitoring is an activity of management. Monitoring assesses the quality of the internal control system's performance over time. Monitoring can be done in two ways: (1) through ongoing monitoring during normal operations, and (2) separate evaluations by management with the assistance of the internal audit function. If monitoring is done regularly during normal operations, it lessens the need for separate evaluations. When management prepares a detailed analysis of gross margin per store and investigates any store that shows a significantly lower gross margin, it is performing a monitoring activity.
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