An effectively designed control may still represent a material weakness in the entity's internal control.Select one:TrueFalse

The statement "An effectively designed control may still represent a material weakness in the entity's internal control" is True.

Explanation

Internal controls are designed to safeguard assets, ensure the accuracy of financial reporting, and promote operational efficiency. However, even if a control is well-designed, it may not be effective in practice due to various factors, such as:

1. Inadequate Implementation: The control may not be properly implemented, which can lead to its failure in detecting or preventing errors and fraud.

2. Human Error: Employees may inadvertently bypass or not adhere to the control procedures due to a lack of training or oversight.

3. Changing Conditions: The nature of the business or the environment in which it operates may change, rendering previously effective controls inadequate.

4. Collusion: If two or more employees collude, they may circumvent controls that are designed to be effective on their own.

Therefore, just having a well-designed control does not guarantee that it will function effectively to mitigate risks, thus potentially presenting a material weakness in internal control systems.