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Inherent Limitation of internal control

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Inherent Limitation of internal control

  • This topic has 2 replies, 2 voices, and was last updated 12 years ago by shine05.
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  • August 16, 2012 at 3:09 pm #54016
    shine05
    Member
    • Topics: 4
    • Replies: 16
    • ☆

    Dear Gromit,
    1- I have a trouble with this question and need you to help me to clarify the inherent limitation of internal control

    “The internal auditor recognizes that certain limitations are inherent in any system of internal controls. Which one of the scenarios is the result of an inherent limitation of internal control?

    A- The contrompller both makes and records cash deposits
    B- The security guard allows one of the warehouse employees to remove assets from the premises without authorization
    C- The organization sells to customers on account, without credit approval
    D- An employee who is unable to read is assigned custody of the organization’s computer tape library and run manuals that are used during the third shift”

    2- Regarding to some materials of internal control, the phrase “avoidable control weaknesses” is used, what is avoidable control weakness?

    Thanks a lot

    August 20, 2012 at 6:30 pm #104042
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10591
    • ☆☆☆☆☆

    1 An inherent control weakness is one that might occur even if the IC system were perfectly designed.

    So, the answer is B. This is an problem caused by human error/bypassing/collusion.

    A can be fixed
    C can be fixed
    D can be fixed

    Nothing can stop the possibility of an inadequate guard not following rules.

    2 I don’t know the phrase as a standard one. All I can assume is that it refers to options A, C, D above: all are avoidable with more thought and planning.

    HTH

    August 20, 2012 at 11:48 pm #104043
    shine05
    Member
    • Topics: 4
    • Replies: 16
    • ☆

    I got it. Thanks Gromit!

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