Question

Question What are some limitations of internal controls and explain them in brief?

Answer 1

Step 1: Definition of internal controls

Internal controls are the control that helps in the proper management of the company.

Step 2: Limitations if internal controls

Not Provide Assurance:

The first limitation of the internal controls is that it does not provide you assurance. Internal controls only provide effective controls. Hence, internal control is not the assurance that the problem is solved.

Human Error:

Internal controls are directly affected by human errors.  If humans make some errors, then the complete process goes in vain.

Collision of Employees:

        As you know, internal controls include the separation of duties that can cause conflict between employees.

Increase cost:

The following limitation of internal control increases the cost of the company.

 

There are four limitations of the internal controls.