CASE 4 HMD Corporation operates a high end manufacturing facility. The capital intensive nature of the corporation's operations makes internal control over the acquisition and the use of fixed assets important management objectives. At the beginning of every financial year, HMD prepares a fixed asset budget that would indicate the planning on their capital expenditure. To prepare this, managers from each department would request capital expenditure from the senior management. This requires them to complete a fixed asset requisition form, which must be approved by the senior management team. HMD has established PPE (property, plant and equipment) guidance and policies that will determine whether the fixed asset requisition is to be considered as capital expenditure or revenue expenditure. The management committee will meet each month to review the budget reports. Among other things, the committee will also compare actual outcome incurred by the managers to their forecasted figures; and to authorize any additional expenditure needed. The committee also reviews and approves any request for asset disposal. The entire relevant document pertaining to the fixed assets request will be forwarded to the accounting department, including copies of vouchers used to document any department's requests for their asset disposal. As any other accounting department, they are responsible to maintain all the company accounts including the fixed assets. Among the policies of HMD, when an asset is acquired, it will be tagged for identification and other necessary documentation. This important documentation is needed for subsequent measurement and updating the fixed asset ledger. Depreciation will be estimated at year end and posted to the general ledger, together with physical inventories of fixed assets. Required: (a) Identify the internal controls over the fixed assets at HMD, based on the following controls: (i) Authorization; (ii) Accurate transaction; (iii) Recorded transaction; and (iv) Reasonableness of recorded transactions. (b) Determine the adequate controls that may exist to safeguard the assets.