Some of the limitations can be:-
1) Human error:- since the system is heavily dependent on human involvement so there are higher chances of error and mistakes committed by human being even while performing his duty for internal control check.
2) Collusion:- two or more people who are responsible to look over each other even without looking may collude to circumvent the event.
3) Management override:- sometimes it is seen that the person from the management level can for his own advantage override any aspect or rule of internal control.
4) Improper segregation of duties:- sometimes the duties are not properly segregated due to insufficient management and due to this one person can interfere in the work of other .
5) Breakdowns:- sometimes even the well designed system also fails due to misunderstanding of duties and responsibility by the employees.
what are some of the limitations on a company’s effective system of internal controls?
Discuss the limitations of Internal Control. Why are internal controls not a guarantee that all is above board? Put this concept in the context of your current work environment or one in which you have previously worked. What does this look like in your world?
Discuss the impact of Sarbanes-Oxley on a company’s internal controls. Be sure to define internal controls and discuss the basic principles for assessing internal controls.
what are some examples of internal controls based on experience? How are internal controls related to the Sarbanes-Oxley legislation? Separately, what is the role of the internal audit function in an organization, and how does this function relate to internal control?
After assessing internal controls are being effective in the sales and collection cycle, the auditor can assume that internal controls will be effective at each of the client’s other transaction cycles. True or False
Review the Robatelli's Pizzeria Case Study. Develop an internal controls system in Robatelli's Pizzeria sales and cash business areas. Prepare a 12- to 16-slide presentation describing the typical activities and outlining an effective system of internal controls for the Sales, Sales Returns, and Cash Collections business areas. Include any associated risks in these areas. Describe specific internal controls that include authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation for each...
Organizations are increasingly transcending country boarders and physical space limitations. What are some effective strategies to motivate dispersed team members in a virtual setting? What are some emerging trends that deal with this challenge in your field? Provide an example.
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
- Define and describe an accounting system -what are internal controls? -what are subsidiary ledgers? -what is a revenue journal? -what is a purchases journal?
1)An effective and robust system of internal control ________. A) should be carefully examined to see if the benefits outweigh the costs of providing such a system B) will eliminate all risks related to entity objectives C) will guarantee that the entity will meet its objectives D) can only provide an entity with reasonable assurance in achieving its financial reporting objectives 2) Physical controls are concerned with limiting ________. A) the informational output of the firm B) access to accounting...
Evaluate management’s role and obligation to shareholders for maintaining effective internal controls over company resources. Assume that you are a key member on an audit engagement team and discover a breach in internal controls. Discuss how you will report the breach and your expectations of management for a resolution to the breach.