Internationally accepted COSO model requires internal controls to be built on the basic components for the purposes of efficient and effective entity operations, reliable financial reporting and compliance with legislations. The correct answer is E; because in an “effective” internal control system, the following five components work to support the achievement of an entity’s mission, strategies and related business objectives:

(1) Control Environment

(2) Risk Assessment

(3) Control Activities

(4) Information and Communication

(5) Monitoring