Which of the following is NOT a factor that influences a business's control environment?

• A. Organizational structure
• B. Management's philosophy and operating style
• C. Human resource policies and practices
• D. Segregation of duties

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'control environment' in financial accounting. The control environment refers to the overall attitude, awareness, and actions of management and employees regarding the importance of controls within the organization.
2. Review the factors that influence the control environment. These typically include organizational structure, management's philosophy and operating style, and human resource policies and practices. These elements shape the tone at the top and the culture of the organization.
3. Recognize that 'segregation of duties' is not a factor influencing the control environment. Instead, segregation of duties is a specific control activity designed to prevent errors and fraud by dividing responsibilities among different individuals.
4. Differentiate between control environment factors and control activities. Control environment factors are broad and foundational, while control activities are specific procedures or mechanisms implemented to achieve control objectives.
5. Conclude that the correct answer is 'segregation of duties' because it is a control activity, not a factor influencing the control environment.