Management and the auditor have to develop processes to assess the effectiveness of each principle contained in the control environment.

Required
Exhibit is an example of an approach to identify the important elements of the company's control environment and an approach to gather evidence to determine if the underlying principle is being achieved. Examples are given for the first two principles underlying the control environment. Complete Exhibit 6.2 for the remaining principles. Consult with your instructor as whether you should use a company in your community for reference, or if it should be done in reference to a generic company. The remaining elements include the following:
a. Organizational structure
b. Management philosophy and operating style
c. Commitment to financial reporting competencies
d. Authority and responsibility
e. Human resources