Page 130 - AA Integrated Workbook STUDENT 2018-19

Chapter 83 4

Limitations of controls

The auditor can never eliminate the need for substantive procedures entirely.

There are inherent limitations to the reliance that can be placed on internal controls
due to:

 Human error

 Ineffective controls

 Collusion of staff in circumventing controls

 The abuse of power by those with ultimate controlling responsibility (i.e.
management override)

 Use of management judgment on the nature and extent of controls it chooses to
implement.

126