Which of the following statements regarding limitations on internal control is true?
A)Companies can design a system of internal control that is foolproof.
B)A well-designed internal control system is a luxury that few companies can afford.
C)An entity's size has little effect on the degree of control that it can obtain.
D)Human errors can weaken an internal control system.

Question

Quizplus · Accepted Answer

Human errors, such as mistakes or deliberate circumvention of policies and procedures, can undermine the effectiveness of an internal control system. It is not possible to design a system that is completely foolproof, and the cost of implementing strong controls may vary depending on the size and complexity of the entity. Therefore, option A and B are incorrect. Option C is also incorrect as the size of the entity may affect the degree of control that can be implemented.

Which of the Following Statements Regarding Limitations on Internal Control