COSO Committee of Sponsoring Organizations of the Treadway Commission
Committee of Sponsoring Organizations of the Treadway Commission
The Framework recognizes that while an effective system of internal control provides reasonable assurance of achieving the entity's objectives, inherent limitations do exist. Even an effective system of internal control can experience a failure. These limitations may result from the:
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Suitability of objectives established as a precondition to internal control
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Reality that human judgment in decision making can be faulty and subject to bias
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Breakdowns that can occur because of human failures such as errors
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Ability of management to override internal control
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Ability of management, other personnel, and/or third parties to circumvent controls through collusion
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External events beyond the organization's control
These limitations preclude the board and management from having absolute assurance of the achievement of the entity's objectives—that is, internal control provides reasonable but not absolute assurance.
| Generated November 9, 2014 22:46:48 |