Important Objectives of a System of Internal Controls Are to Safeguard

question 19

Essay

Important objectives of a system of internal controls are to safeguard assets and to enhance the accuracy and reliability of the accounting records. Briefly discuss how (1) the human element and (2) the size of the business affect the implementation of a system of internal controls.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ultimately revealing the net profit or loss.

Internally Generated Patent

A patent developed through a company's own research and development efforts.

Research and Development

Activities undertaken by businesses or organizations to innovate and introduce new products or services, typically involving substantial investment.

Technological Feasibility

The point at which a company determines that a new technology can be developed and made into a working product.