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  • Major Disadvantages With Active Internal Controls

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    Msaudi Sauden
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    Active internal controls are most vulnerable to human failure if those responsible are poorly trained or inattentive. They are also vulnerable to conspiracy and perpetrator evasion as fraudsters know how to exploit vulnerabilities. Additionally, active controls require considerable investment to function without interruption and can negatively impact productivity if not designed properly.

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    Active internal controls are most vulnerable to human failure if those responsible are poorly trained or inattentive. They are also vulnerable to conspiracy and perpetrator evasion as fraudsters know how to exploit vulnerabilities. Additionally, active controls require considerable investment to function without interruption and can negatively impact productivity if not designed properly.

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    © All Rights Reserved
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    2 views2 pages

    Major Disadvantages With Active Internal Controls

    Uploaded by

    Msaudi Sauden
    Active internal controls are most vulnerable to human failure if those responsible are poorly trained or inattentive. They are also vulnerable to conspiracy and perpetrator evasion as fraudsters know how to exploit vulnerabilities. Additionally, active controls require considerable investment to function without interruption and can negatively impact productivity if not designed properly.

    Copyright:

    © All Rights Reserved
    Download as RTF, PDF, TXT or read online from Scribd
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    of 2

    Major Disadvantages

    with Active Internal


    Controls.
    Most vulnerable to human failure. Most are

    operator dependent. Therefore if those


    responsible for maintaining the control
    features are poorly trained, inattentive to
    duty due to distractions, illness or are
    negligent even for brief periods, the best
    active control may fail.
    Also vulnerable to conspiracy and pseudoconspiracy.
    Vulnerable to perpetrator evasion. Most
    people who commit fraud are experts in
    those areas they consider for fraud. They
    know the vulnerabilities and can easily
    determine ways and means of exploiting
    them.
    They are costly. They need to function
    without interruption if they are to be
    effective. This may mean the investment of
    considerable amounts of resources.
    Most affect productivity. For example in
    time spent in checking authorisations,
    reviewing transactions, giving passwords. If

    not properly designed their negative impact


    on productivity may be even greater.
    19/09/2014 Passionate

    Auditing

    about Internal

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