Which of the following is a component of internal control?

The control environment is a critical component of internal control because it sets the tone for an organization, influencing the control consciousness of its people. It encompasses the integrity, ethical values, and competence of the entity’s people, as well as the general philosophy and operating style of management. This environment establishes the foundation for an effective internal control system, as it shapes the culture and dictates how strategies are implemented and objectives are pursued.

A well-defined control environment fosters a strong internal control framework, ensuring that policies and procedures are followed, risks are identified and managed, and that the organization operates effectively and efficiently. It incorporates the organization's structure, authority, and accountability which align with governance and oversight processes to support the overall objectives.

While auditor independence, stakeholder engagement, and human resource management are important considerations in the broader context of governance and operational effectiveness, they do not specifically define the internal control system itself. Auditor independence primarily pertains to the integrity of the audit process, stakeholder engagement refers to the interaction with various parties of interest, and human resource management involves policies and processes regarding staff, but these elements do not directly constitute the components of internal control.