Internal controls in large and medium sized entities can only provide an entity with reasonable assurance in achieving its financial reporting objectives. Which of the following is not an inherent limitation of internal control?
A) human error that results in a breakdown in internal control
B) collusion by two or more individuals to circumvent a control
C) a control within a software program being overridden or disabled
D) changing audit risk parameters

Question

Quizplus · Accepted Answer

Changing audit risk parameters is not an inherent limitation of internal control. It is a decision made by the auditor based on their risk assessment and evaluation of internal controls. The other options listed are inherent limitations of internal control that may occur despite the best efforts of management and the control environment.

Internal Controls in Large and Medium Sized Entities Can Only