Co LTD runs three manufacturing production lines. Senior management are concerned about levels of wastage in the factory, and as a result is looking to improve the control environment.
Which of the following actions demonstrate a good control environment? Select ALL that apply.
A Monthly inspection of production lines by senior management
B The performance of production line managers is based on the volume of production
C Staff are trained on new equipment
D Daily production logs and failure rates are noted
E Senior management require weekly calibration of equipment
F The maintaince staff who conducted the weekly calibrations need not complete records but should report any serious problems
Ans D, D
Control Environment – why are A & E not the answers?
C training is impt for a good control environment
D isnt D more a control activity that to do with the control environment
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Control Environment
7y ago#1The question is trying to separate control environment from control activities/procedures.
A is a control procedure
B is not much to do with control
C is important for being able to understand the importance of controls so is part of the control environment.
D on the margin, I would say. Very like a control procedure. Perhaps they think that to become a full procedure you would need to specify what happens if poor results are discovered.
E Again, I agree with you. Calibrating equipment could be classed as a control procedure (like doing a monthly bank reconciliation)
F Obviously, not a contender
Why does D demonstrate a good control environment?
5y ago#3As said in my previous answer, I think it is hard to classify D to decide if is it a control procedure or part of the control environment.
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