Final answer:
It is true that internal control systems may not always be effective due to human errors, bypassing procedures, or resistance within bureaucracies, making human fallibilities a limiting factor.
Step-by-step explanation:
The statement that even a good system of internal controls will often not be completely effective due to the fallibilities of the people applying and enforcing the controls is true. Internal control systems are designed to manage risk and ensure that business processes are carried out effectively and efficiently. However, no system can be completely foolproof due to the human element involved. People may make errors, bypass procedures, or even collude to commit fraud, which can undermine the effectiveness of the controls. Additionally, as suggested in the reference material, internal bureaucracy may resist criticism, creating a challenging environment for reporting misconduct. This can lead to ethical dilemmas for individuals who must choose between speaking out and preserving their career.