Question

for each control enviroment princple provide an examplw of how an organization might appy that princple

Exhibit 3.2. Principles Associated with the Control Environment 1. The organization demonstrates a commitment to integrity and ethical values. 2. The board of directors demonstrates independence from management and exercises oversight of the development and performance of internal control 3. Management establishes, with board oversight, structures, reporting lines, and appropriate authorities and responsibilities in the pursuit of objectives 4. The organization demonstrates a commitment to attract, develop, and retain competent individuals in alignment with objectives. 5. The organization holds individuals accountable for their internal control responsibilities in the pursuit of objectives.

Answer 1

Ans. to ne at (1) The organisation demonstrates a commitment to integrit and ethical values i ů sets the the top (ii) Establishes Standards of Conduct (iii) Evaluates adherence to standards of conduct iy Addresses deviations in a timely manner (2) The board of Directors demonstrates independence from management and excereises oversight of the development and performance of internal control ů Establishes oversight responsibilities 1) Applies Relevant expertise (iii) operates independently (iv) provides oversight for the system of internal Control (3) Management establishes, with board oversight strue- tures reporting lines and appropriate authorities and Responsibilities in the Pursuit of objectives: i considers all structures of the entity (ii) Establishes reporting lines (iii) Defines, assign, and limit authorities and res- Ponsibilities (4) The organisation demonstrates a commitment to attract, Develop, and retain competent individuals in alignment with objectives :-

B •5123 ů Establishes Pelicies and practices Evaluated competence and addresses shortcomings (1) Attracts, develops, and retains individuals (ivi plaus prepares for Succession (5) The organization holds individuals accountable for their interual control responsibilities in the pursuit of objectives :- (0) Euforces Accountability througa Structures, authorities and respensibilities, (i) Establishes Performan Measure , incentives and rewards (1) Evaluates performance Measures incentives and rewards for ongoing relevance liv considers excessive pressures ance (U) Evaluates Performance and rewards, or discipline individuals.