10.02

Control Activities

Principle 10 - Design Control Activities

Attribute 10.02 - Management designs control activities in response to risks to achieve an effective internal control system. Control activities are the actions management establishes through policies and procedures to specifically mitigate risks to achieving the entity's objectives to acceptable levels. Control activities support all the components of internal control but are particularly aligned with the risk assessment component. As part of periodic and ongoing risk assessments, management identifies objectives; the risks related to the entity and its objectives, including its service organizations; the entity's risk tolerance; and risk responses. Management designs control activities or modifies existing control activities to mitigate risks to acceptable levels within management's defined risk tolerance. Typically, control activities are needed when an entity chooses to either reduce or share a risk. The nature and extent of the risk response and any associated control activities will depend, at least in part, on management's defined risk tolerance.

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