Current Attempt in Progress

During the initial stages of the audit of Campbell Company, a distributor of sheet metal across the southeastern United States, the

audit partner with overall responsibility for the engagement has noted that management has implemented strict codes of ethics for all

employees. This attitude and approach from top management would represent which of the following?

An entity$-$level control, because senior management's attitude and approach are likely to permeate the entire organization.

An example of a strong control environment, which would allow the auditor to increase control risk.

An example of effective oversight by the board of directors, enabling the auditor to decrease the control environment.

A transaction$-$level control, because this is likely to decrease the risk of material misstatement.