Limitations
Internal control can provide reasonable, not absolute, assurance that the objectives of an organization will be met. The concept of reasonable assurance implies a high degree of assurance, constrained by the costs and benefits of establishing incremental control procedures.
Effective internal control implies the organization generates reliable financial reporting and substantially complies with the laws and regulations that apply to it. However, whether an organization achieves operational and strategic objectives may depend on factors outside the enterprise, such as competition or technological innovation. These factors are outside the scope of internal control; therefore, effective internal control provides only timely information or feedback on progress towards the achievement of operational and strategic objectives, but cannot guarantee their achievement.
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Famous quotes containing the word limitations:
“To note an artist’s limitations is but to define his talent. A reporter can write equally well about everything that is presented to his view, but a creative writer can do his best only with what lies within the range and character of his deepest sympathies.”
—Willa Cather (1876–1947)
“The motion picture made in Hollywood, if it is to create art at all, must do so within such strangling limitations of subject and treatment that it is a blind wonder it ever achieves any distinction beyond the purely mechanical slickness of a glass and chromium bathroom.”
—Raymond Chandler (1888–1959)
“That all may be so, but when I begin to exercise that power I am not conscious of the power, but only of the limitations imposed on me.”
—William Howard Taft (1857–1930)