Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 7 - Fraud, Internal Control, and Cash - Brief Exercises: BE7-2

Answer

The internal control has the following purpose: a) Safeguard the assets b) Enhance the reliability of accounting records c) Increase efficiency of operations

Work Step by Step

a) This is to ensure the safety of cash, documents, business papers, inventories, records etc. b) Accounting records becomes reliable, when it is properly and timely maintained. This should properly checked and accurate. c) The operations of the company should be studied and increased through internal control, so that maximum output can be achieved. ยท Ensure compliance with laws and regulations โ€“ The laws of the land must be respected and complied in time. The internal control system should verify the compliance.
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