Week 6 - Limitations of Internal Controls Recap Flashcards
1
Q
What is the first limitation of internal control?
A
Cost versus benefit
2
Q
What is the second limitation of internal control?
A
May only cover routine transactions - not one-off/unusual events
3
Q
What is the third limitation of internal control?
A
May not take into account human error
4
Q
What is the fourth limitation of internal control?
A
Controls can still be susceptible to deliberate fraud and/or collusion between parties
5
Q
What is the fifth limitation of internal control?
A
Management may be able to over-ride controls
6
Q
What is the sixth limitation of internal control?
A
The business environment may change, rendering controls weaker
7
Q
What is the seventh limitation of internal control?
A
Over reliance on IT
