Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?
Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?
The option that would have the least impact on an assessment of a department's control environment is related to normal operations that do not directly influence the control environment. The department managing long-term investments, including investment in derivatives and other financial instruments to maximize return, primarily pertains to the execution of investment strategies rather than the establishment and maintenance of a control environment. Therefore, it would have the least impact compared to other options that directly relate to control environment elements such as management's tone, duplicated functions for verification, and compliance with control procedures.
I don't understand the question and the answer...
In the first answer, maximizing return on investment is a normal operation that does not have a significant impact on an assessment of a department's control environment.
Control environment : "The attitude and actions of the board and management regarding the importance of control within the organization. The control environment provides the discipline and structure for the achievement of the primary objectives of the system of internal control. The control environment includes the following elements : - Integrity and ethical values, - Organizational structure, - Management's philosophy and operating style, - Assignment of authority and responsibility, - Human resource policies and practices, - and competence of personnel.".