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The ELC (Entity Level Controls) characteristic that BEST captures their nature is that they are:
ALimited to financial reporting only
BPervasive and require professional judgement to evaluate
CAlways transaction-specific and easy to test
DWholly automated within the ERP
Answer & Solution
Correct answer: C. Always transaction-specific and easy to test
1. ELCs operate across the entire organisation, hence pervasive.
2. They span the COSO components other than control activities.
3. Their subjective nature requires more professional judgement than transactional tests.
_Source: ICAI BoS CA Final Paper 3, Ch 4 "Special Aspects of Auditing in an Automated Environment"_
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