The company has

good internal controls, which addresses and is based on the generally accepted

components of internal control, namely,

·       the control environment

·       the risk assessment process

·       the information system relevant to financial reporting

·       control activities

·       the monitoring of controls

The following

piece of information relates to the payroll and personnel cycle of a company:

Management

promotes sound policies regarding human resources.

From the following

list of options, identify the component of internal control to which the above statement

relates: