There are inherent limitations in control. A sound and well designed system of internal control reduces, but cannot eliminate the possibility of
– poor judgement in management decision-making;
– human error or mistake;
– control activities and processes being deliberately circumvented by the collusion of employees or others;
– management overriding controls; and
– the occurrence of unforeseeable circumstances.
Regular internal audit can help to timely detect any control loopholes, non-compliance and fraud.
