ACCA Advanced Audit and Assurance (AAA) Practice Exam

What are control activities primarily designed to do?

1. Ensure all employees are trained

2. Support management directives and policies

3. Facilitate faster transaction processing

4. Improve customer satisfaction

The correct answer is: Support management directives and policies

Control activities are a critical component of an organization's internal control system, established to ensure that management directives and policies are effectively implemented. They are designed to mitigate risks and safeguard assets by establishing procedures and operations that align with the strategic objectives of the organization. By supporting management directives, control activities help ensure that the organization adheres to applicable laws and regulations, maintains the accuracy of financial reporting, and promotes operational efficiency. These activities include a variety of procedures such as approvals, authorizations, verifications, reconciliations, and business performance reviews. The effectiveness of control activities directly impacts the overall governance and risk management framework of the organization. Thus, their primary purpose is to support management in controlling and directing operations towards achieving goals, which is why this choice is the most appropriate. In contrast, while ensuring all employees are trained is important for overall performance, it does not specifically relate to the core purpose of control activities. Likewise, facilitating faster transaction processing and improving customer satisfaction, although beneficial outcomes of efficient operations, do not align directly with the primary function of control activities within the internal control framework.