Chapter 7, Problem 4DQ

To determine

Internal Control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the some of the internal control procedures:

• Competent personnel, rotating duties, and mandatory vacations
• Separating responsibilities for related operations
• Separating operations, custody of assets, and accounting
• Proofs and security measures

To determine: The reason for maintaining accounting records to be separated from the responsibility of operations.