Internal controls are required to safeguard assets and to ensure ethical business practices. (1) identify and explain the reason for any two of the seven internal control procedures and (2) provide examples of how your two selected internal control procedures will meet the goal of safeguarding assets and promoting ethical business practices.

Out of the 7 internal controls, I would focus on only two: the preventive controls and the detective controls.

Preventive Controls

The main concept of preventive control is the compartmentalization of job responsibilities and check-and-balance. Accounting transactions such as processing inventory, approving refunds, writing and signing of checks, initiating money transactions, paying fixed and variable costs and the like. Each of these things are done by different departments. That is why interdepartmental cooperation is important. This is done so that any possible theft and mishandling of confidential information may be minimized because they do not know all the in's and out's of the company's accounts.

Detective controls

These controls are done to identify existing problems. Most of these controls involve audits, reviewing of inventory and transactions and reconciliation of bank and cash accounts. All of these are records that are kept for end-of-the-month report cases or when problems arise and they need to trace its origin. In this way, even in the rare cases that money has been breached, the detective controls can pinpoint the culprit.

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