Even in effectively controlled organizations, high level personnel may be able to override prescribed policies or procedures for personal gain or advantage. This should not be confused with management intervention, which represents management actions to depart from prescribed policies or procedures for legitimate purposes. Collusion - Collusion between two or more individuals can result in control failures. Individuals acting collectively often can alter financial data or other management information in a manner that cannot be identified by the control system. In determining whether a particular control activity should be established, the risk of failure and the potential effect must be considered along with the cost of establishing the control.
Excessive control is costly and counterproductive.
Too little control presents undue risk. Agencies should make a conscious effort to strike an appropriate balance. Click here if you would like to print a Word Version of this document.