When considering internal control, an auditor must be aware of the concept of reasonable assurance that recognizes that

(a) the employment of competent personnel provides assurance that the objectives of internal control will be achieved.

(b) the establishment and maintenance of a system of internal control is an important responsibility of management, not of the auditor.

(c) the cost of internal control should not exceed the benefits expected to be derived from internal control.

(d) the segregation of incompatible functions is necessary to obtain assurance that the internal control is effective.