What is "control activities" under internal controls?

What is "control activities" under internal controls?

• A. Policies and procedures that help ensure management directives are carried out.
• B. The tone at the top.
• C. The control environment's risk assessment.
• D. The communication with external auditors.

Answer: (A)

Control activities are the policies and procedures that help ensure management directives are carried out. They are the concrete actions the organization puts in place to mitigate risks and achieve objectives. Examples include approvals and authorizations, verifications, reconciliations, physical controls over assets, and separation of duties. These activities can be preventive or detective and operate at all levels and functions of the organization to ensure policies are followed and outcomes align with plans. The other elements are parts of different components of internal control. The tone at the top relates to the control environment—management’s attitude and philosophy toward controls. Risk assessment is the process of identifying and analyzing risks. Communication with external auditors falls under information and communication and reporting.

Control activities are the policies and procedures that help ensure management directives are carried out. They are the concrete actions the organization puts in place to mitigate risks and achieve objectives. Examples include approvals and authorizations, verifications, reconciliations, physical controls over assets, and separation of duties. These activities can be preventive or detective and operate at all levels and functions of the organization to ensure policies are followed and outcomes align with plans.

The other elements are parts of different components of internal control. The tone at the top relates to the control environment—management’s attitude and philosophy toward controls. Risk assessment is the process of identifying and analyzing risks. Communication with external auditors falls under information and communication and reporting.