Answer (D) is correct . The benefits of internal controls must always exceed the costs of implementing them. A system of absolute assurance could only be implemented at prohibitively great expense. Reasonable assurance is a cost beneficial solution.
Answer (A) is incorrect because Limitations sometimes hinder operating efficiency.
Answer (B) is incorrect because Management is always responsible for internal control, regardless of the specific control in question.
Answer (C) is incorrect because Methods of data processing (centralized vs. decentralized, batch vs.?online, etc.) are determined by the business model; internal controls are then adapted to the circumstances.
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Which one of the following internal accounting controls recognizes these two factors?