Requirement
The entity holds individuals accountable for their internal control responsibilities in the pursuit of objectives.
Points of Focus
Enforces Accountability Through Structures, Authorities, and Responsibilities
Requirement: Management and the board of directors establish the mechanisms to communicate and hold individuals accountable for performance of internal control responsibilities across the entity and implement corrective action as necessary.
Establishes Performance Measures, Incentives, and Rewards
Requirement: Management and the board of directors establish performance measures, incentives, and other rewards appropriate for responsibilities at all levels of the entity, reflecting appropriate dimensions of performance and expected standards of conduct, and considering the achievement of both short-term and longer-term objectives.
Evaluates Performance Measures, Incentives, and Rewards for Ongoing Relevance
Requirement: Management and the board of directors align incentives and rewards with the fulfillment of internal control responsibilities in the achievement of objectives.
Considers Excessive Pressures
Requirement: Management and the board of directors evaluate and adjust pressures associated with the achievement of objectives as they assign responsibilities, develop performance measures, and evaluate performance.
Evaluates Performance and Rewards or Disciplines Individuals
Requirement: Management and the board of directors evaluate performance of internal control responsibilities, including adherence to standards of conduct and expected levels of competence, and provide rewards or exercise disciplinary action, as appropriate.
[P] Takes Disciplinary Actions
Requirement: A sanctions process is defined, and applied as needed, when an employee violates the entity’s privacy policies or when an employee’s negligent behavior causes a privacy incident.
Explanation
Individuals must be held personally accountable for their control duties through clear responsibilities, performance measures, incentives, and discipline when standards are violated. Auditors care because accountability turns written policies into actual behavior — and because badly designed incentives or excessive pressure can push people to cut corners or commit fraud.
