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- Employee frustration or apathy in the event of bad execution or planning
- An internal control system that is too rigidly designed to allow for adaptation to a particular organization may be difficult to sustain
- It may cause a company's auditors to become over-dependent on the internal control system, which may lead them to relax other measures of checking for fraud and errors.
Disadvantages of Internal Control:1. It involves expenditure which may not be affordable by the small organizations.2. Internal control is concerned with routine transactions many times unusual transactions may be over looked.3. The system of internal control may be weakened due to inefficiency in handling of the system.4. There are chances of diverse objectives among employees in the departments and staff in charge of internal control.5. Management may manipulate the operation of internal control system.
Elements, features characteristics principles of a good Internal Control System:An effective internal control system should have the following factors:1. Competent and trust worthy staff: people in charge of internal control system must be reliable and highly competent about the work. Lack of knowledge and dishonesty will spoil the efficiency of the system.2. Records of financial and other organizational plans: A good internal control system must have good documentation system. Filing, recording, classifying, etc will help in this regard.3. Segregation of duties: normally, there should be a separate department for internal control this reduces frauds, bias etc. normally, a clerk in charge of accounting function should not be in charge of assets also.4. Supervision: proper reviewing of the operations of the company regularly makes the control system effective.5. Authorization: all transactions must be properly authorized. In other words, the authority of each person should be well defined.6. Sound practices: the company should have well established procedures, policies, delegations organizational manuals etc.7. Internal Audit: it’s a part of internal control and it should be independent of internal check.8. Accounting Controls: proper accounting information systems should be established so that the information relating to accounts is properly collected, recorded and accounts prepared.
Duplication of work
More cost less benefits at some stages.
demotivated staff
delay of work
