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Internal control amongst management

Internal control has gained increasing importance among management, external auditors, regulators, and others. Use a specific example that illustrates the answer.

When considering the effectiveness of an internal control structure, what inherent limitations should be considered?

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Internal control has gained increasing importance because we are now aware of the devastation that can occur when there is a poor internal control structure. When we look at companies like Enron, WorldCom, or others, they all share a common factor - a weak internal control system. For example, the executives at Enron Corporation overrode the internal control system that was in place. By doing so, they were able to authorize changes to accounting transactions ...

Solution Summary

Internal control has gained increasing importance among management, external auditors, regulators, and others. Use a specific example that illustrates the answer.

When considering the effectiveness of an internal control structure, what inherent limitations should be considered?

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