Question 30Which of the following situations is an example of an inherent limitation of Internal Control? A programming error in the design of an automated controls allows an employee to give himself an unauthorized pay increase. A fraud scheme where two employees agreed to collusion whereby an employee orders personal goods and his supervisor who is on in the scheme, signs the checks to pay for the goods. Management's failure to enforce control policies surrounding access to inventory allows employees to steel assets. A lack of physical controls over the safeguarding of assets allows an employee to steal company assets.

Internal controls are the principles and guidelines set by the substance for every one of its cycles and offices. It guarantees that the recorded exchanges are in finished trustworthiness and honesty. An effective internal control framework mitigates misrepresentation. Internal control is a cycle, affected by an element's directorate, the executives, and other staff, intended to give sensible affirmation: That data is reliable, accurate, and timely. Of compliance with relevant laws, guidelines, agreements, approaches, and techniques. Few limitations include- Sensible Assurance. Plot by Two or More Employee Human Error. Improper Management Override of Controls. Poor or Improper Judgment from Management. Cost and Benefit Consideration. Inappropriate Communication or Training. Unanticipated Circumstances. Hence, the correct answer is option D.

Answered: Which of the following situations is an…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

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Question 30

Which of the following situations is an example of an inherent limitation of Internal Control?

		A programming error in the design of an automated controls allows an employee to give himself an unauthorized pay increase.
		A fraud scheme where two employees agreed to collusion whereby an employee orders personal goods and his supervisor who is on in the scheme, signs the checks to pay for the goods.
		Management's failure to enforce control policies surrounding access to inventory allows employees to steel assets.
		A lack of physical controls over the safeguarding of assets allows an employee to steal company assets.