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Effective internal controls helps an organization in achieving its operational, financial and administrative objectives. Compliance to Sarbanes Oxley not only requires effective internal controls, but a right balance between the costs of controls and the risks involved. Controls come at a cost, an organization cannot afford to place so many controls that they hamper achieving the organziational objectives smoothly. On the flip side, an organization has to take care that risks are appropriately managed. Excessive risks and Excessive controls, both come with their set of problems. Here are some common problems associated with excessive risks as well as excessive controls.

Problems with Excessive Risks:
1. Poor Quality of Business Decisions
2. Non-Compliance with Laws such as Sarbanes Oxley, HIPAA, Basel II etc
3. Loss of Public Image and customer confidence
4. Loss to assets, materials, venture funding, grants etc
5. Failure to meet business, financial and operational objectives.

Problems with Excessive Controls:
1. Marked increase in the level of bureaucracy
2. More the controls, lesser is the level of productivity in an enterprise
3. Increase in the turnaround time for critical activities
4. More the controls, more activites are required to accomplish these control resulting in time and resource crunches.
5. Excessive controls unnecesarily complicate processes resulting in missed opportunities

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