What are the limitations of the COSO internal control framework?
There are six major limitations of internal control that has been identified by The Committee of Sponsoring Organizations (COSO). These limitations include:
Human judgement – Human judgement can be defective and can also become subject to bias.
Errors – Breakdowns and failures occur as long as people are those who are operating internal control systems, this can include basic errors.
Override of internal controls – Management is capable of overriding internal controls.
Collusion –Management or other personnel can avoid or skip internal controls and can partake in collusion.
External events – External events are can cause incidents that are beyond management’s control.
Objectives for controls – These must be suitable as a precondition to internal control (unrealistic or improbable objectives can be set that internal controls can’t fully address).
Back To All Questions
You might also be interested in...
-
What are the key components of the COSO internal control framework?
Just remember it would be a CRIME to forget the 5 components. The 5 components of the COSO internal control framework include control environment, risk assessment, information & communication, monitoring, and existing control activities.
-
What are the key principles of the control environment?
The control environment is one of the five key components of the COSO internal control framework. At a high-level, the control environment basically addresses “tone at the top”. It addresses the policies and procedures that are in place to provide the basis for carrying out internal controls in an organization. There are 5 key principles...
What are the key components of the COSO internal control framework?
Just remember it would be a CRIME to forget the 5 components. The 5 components of the COSO internal control framework include control environment, risk assessment, information & communication, monitoring, and existing control activities.
What are the key principles of the control environment?
The control environment is one of the five key components of the COSO internal control framework. At a high-level, the control environment basically addresses “tone at the top”. It addresses the policies and procedures that are in place to provide the basis for carrying out internal controls in an organization. There are 5 key principles...
