Question

12. Consider the following question that the Board of Directors for Warn Sports Supply might ask themselves about the business processes and internal controls:

If Nancy or Jim fail to implement proper controls, is Ray held accountable if he does not follow up with them?

Which element of the COSO framework is most closely identified? Recall that Ray Kramer is the manager, Jim Adams and Nancy Ford are both employees. (Answer IS NOT "A")

1. Control environment
2. Information and communication
3. Risk assessment
4. Monitoring
5. Control activities

Answer 1

(d) Monitoring

Explanation:

In monitoring activity, the managers are supposed to monitor the work of employees and oversee the functioning of the organisation. If the things aren't working correctly, the managers are supposed to correct those deficiencies as quickly as possible.

In the above specified case study, the monitoring element of COSO framework is most closely identified because it focus on the the accountability of manage in case of insatisfactory performance of his employees.