what are challenges facing the internal control systems?
To answer this question, my personal experince as a one time internal control manager comes to play.
Internal control is to help employees have a precise way of doing their job and to help management easy understanding of what is achieved in the budgeted work so far. It also help management to monitor the activities of employees so as to guide and protect them from performing sharp pratices (fraud) that might put the compnay as risk of folding up.
A good internal control will further have a positive impact on the shareholders' confidence on the financial reporting of the compnay.
There are limitations and factors mitilating against internal control and they are:
The size of the company, the scope of job to be done, competitors and the general/moral behaviour of the employees to work. These factors can and always work against internal control. When put in place internal control is seen be employees as an enemy virus placed there to police them so they look for every loophole to bypass this control partern.
There is therefore, need for management to educate the employees about the importance of this control and to make it an offense to jump or avoid these controls.