Which of the following is an inherent limitation of any clients internal control?

Multiple Choice

• Procedures designed to assure the execution and recording of transactions in accordance with proper authorizations are effective against frauds perpetrated by management.

• Procedures whose effectiveness depends on separation of duties can be circumvented by collusion.

• The competence and integrity of client personnel provide an environment conducive to control and provides assurance that effective control will be achieved.

• The benefits expected to be derived from effective internal controls usually do not exceed the costs of effective internal controls.