Answer (A) is correct . Human resource policies and practices are a factor in the control environment component of internal control. They affect the entity’s ability to employ sufficient competent personnel to accomplish its objectives. Policies and practices include those for hiring, orientation, training, evaluating, promoting, compensating, and remedial actions. Although control activities based on the segregation of duties are important to internal control, they do not in themselves promote employee competence.
Answer (B) is incorrect because Effective hiring practices result in selection of competent employees.
Answer (C) is incorrect because Effective training programs increase the competence of employees.
Answer (D) is incorrect because Performance evaluations improve competence by identifying substandard work and by serving as a basis for rewarding exceptional efforts.
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