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Unformatted text preview: 1 Internal Controls Part 1 Overview ` Goals of internal control ` Controls ` Risk assessment ` Control activities Internal Control Goals ` Safeguard assets ` Ensure accuracy and reliability of accounting information ` Promote operational efficiency ` Encourage adherence to company policies. Controls ` Preventive controls are those that management puts in place to prevent problems from occurring. ` Detective controls alert us when the preventive controls have failed ` Corrective controls are procedures a company uses to solve or correct a problem. Risk Assessment ` How do you assess risk? ` How does your risk assessment affect behavior? ` How should risk assessment affect your use of controls? ` A good audit trail ` Sound personnel policies and practices ` Separation of duties ` Physical protection of assets ` Internal reviews of controls Control Activities ` Internal reviews of controls ` Timely performance reports 2 ` You have been hired by the management of Alden, Inc., to review its You have been hired by the management of Alden, Inc....
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- Fall '09