Which organization is responsible for setting standards for an effective internal control system for federal agencies?

Which organization is responsible for setting standards for an effective internal control system for federal agencies?

• A. Government Accountability Office (GAO)
• B. Federal Reserve
• C. Department of Defense
• D. General Services Administration

Answer: (A)

Effective internal control across federal agencies relies on clearly defined, government-wide standards issued by the Government Accountability Office. The GAO publishes the Green Book, Standards for Internal Control in the Federal Government, which lays out what a strong internal control system looks like and the criteria for designing, implementing, and evaluating controls. This framework centers on the five components—control environment, risk assessment, control activities, information and communication, and monitoring—and is tailored for the federal context, often aligning with the widely used COSO framework to ensure consistency and accountability across agencies. The other options don’t serve as the standard-setting authority for all federal agencies. The Federal Reserve focuses on monetary policy and financial stability rather than government-wide internal control standards. The Department of Defense is a single department with its own controls, not a national standard-setter. The General Services Administration handles procurement and related operations, not internal control standards for the entire federal government.

Effective internal control across federal agencies relies on clearly defined, government-wide standards issued by the Government Accountability Office. The GAO publishes the Green Book, Standards for Internal Control in the Federal Government, which lays out what a strong internal control system looks like and the criteria for designing, implementing, and evaluating controls. This framework centers on the five components—control environment, risk assessment, control activities, information and communication, and monitoring—and is tailored for the federal context, often aligning with the widely used COSO framework to ensure consistency and accountability across agencies.

The other options don’t serve as the standard-setting authority for all federal agencies. The Federal Reserve focuses on monetary policy and financial stability rather than government-wide internal control standards. The Department of Defense is a single department with its own controls, not a national standard-setter. The General Services Administration handles procurement and related operations, not internal control standards for the entire federal government.