Internal Controls in Large and Medium Sized Entities Can Only

question 4

Multiple Choice

Internal controls in large and medium sized entities can only provide an entity with reasonable assurance in achieving its financial reporting objectives. Which of the following is
Not an inherent limitation of internal control?

• A) human error that results in a breakdown in internal control
• B) collusion by two or more individuals to circumvent a control
• C) a control within a software program being overridden or disabled
• D) changing audit risk parameters

---

Definitions:

Corporate Houses

Large companies or business organizations that operate in multiple areas or sectors.

Subsidized Rate

A reduced interest rate on loans provided by the government or other institutions to support specific groups or activities.

Productivity

The measure of how efficiently goods and services are produced, often evaluated as output per unit of input.

Standard Of Living

The level of wealth, comfort, material goods, and necessities available to a person, family, or group in a society.