Accounting Assignment 8.1 Handout Name Course Instructor Date 1. Internal controls are designed to safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate accounting records. Requirements: R1. Which objective is most important? Safeguarding assets R2. Which must the internal controls accomplish for the business to survive? Give your reason. There is a need to protect assets, since failure to do this would be throwing away resources necessary for survival. 2. The Sarbanes-Oxley Act affects public companies. Requirement R1. How does the Sarbanes-Oxley Act relate to internal controls? Be specific. Public Companies need to provide an internal control report, while outside auditors assess a client’s internal controls. There is also separation of service provision between auditing and consulting services. 3. Separation of duties is a key internal control. Requirement R1. Explain in your own words why separation of duties is often described as the cornerstone of internal control for safeguarding assets. Describe what can happen if the same person has custody of an asset and also accounts for the asset. Separation of assets promotes accounting record accuracy and limits fraud. This is achieved through separation of accounting from custody of assets. There is a need to separate accounting separations from custody of assets to avoid fraudulent activities. 4. There are 5 characteristics identified in the ch...