CIMA BA4 · Chapter 7 · Question 7 of 10
Which of the following is a limitation of any system of internal control?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Controls can be overridden by management or circumvented by collusion
Explanation
Internal control provides reasonable, not absolute, assurance. Limitations include human error, collusion between staff, management override and the cost of controls exceeding benefits. Controls do not remove all risk or replace external audit, and they can be documented.
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