Internal Control A. All the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies B. Principles of Internal Control 1. 2. 3. 4. 5. 6. Establish Maintain Adequate Assets & -preprinted and prenumbered forms Key Employees-adequate insurance against casualty Recordkeeping from Custody of Assets-discourages collusion Responsibility for Related Transactions-separation of duties Apply Controls-cash registers, time clocks, check protectors, etc. Perform Regular & Independent -internal & external auditors C Technology & Internal Control 5 -are clear and assigned to one person Processing Errors-nearly eliminates math errors Testing of Records-casily accessible Evidence of Processing-fewer hard copy documents Crucial Separation of Duties-fewer employees to divide tasks amongst Increased risks involve credit card number theft, computer Allows for More viruses, and online impersonation D. Limitations of Internal Control" 1. Human (negligence) and human principle (intent to deceive)"