Common inherent limitations in internal control include ________.
A)ineffective understanding of the purpose of a control
B)controls within a software system are never overridden
C)no evidence or history of collusion within the organization
D)top management agree as to the type and extent of system to implement

Question

Quizplus · Accepted Answer

Inherent limitations in internal control are factors that are present in any control system and cannot be completely eliminated. One such limitation is the possibility of employees not understanding the purpose of a control, which can lead to ineffective implementation. Other examples of inherent limitations include the possibility of human error, management override, and collusion among employees. However, controls within a software system are not inherently limited in this way and can be designed to prevent override. The absence of evidence or history of collusion within an organization does not indicate the absence of inherent limitations, as this type of risk may not be readily apparent or easily detectable. Finally, top management agreement on the type and extent of system to implement is not an inherent limitation, but rather a necessary step in effective internal control.

Common Inherent Limitations in Internal Control Include ________