Businesses today are required to follow established guidelines and regulations when it comes to maintaining and reporting business transactions. The aim of these guidelines and regulations is to ensure the accuracy of a company's accounting reports and also to ensure that the company's assets are not misappropriated or misused by its employees. Internal controls within a company fall into different categories; in this article I will discuss establishing accountability, physical, mechanical and electronic controls, segregation of duties and independent internal audit. In addition to internal controls, I will also discuss the acts of Congress that paved the way for today's internal controls, as well as the limitations of internal controls. The first things I'll talk about are the different types of internal controls. Internal controls that companies use include, but are not limited to: establishing accountability, using physical, mechanical and electronic controls, segregation of duties and independent internal auditing. All of these internal controls work together to ensure that company assets are not misused by employees, as well as to ensure that financial reporting is as accurate as possible. The basis for establishing responsibilities is to help eliminate the problem of not knowing which employee is responsible for a calculation error. For example, a cashier must open a new cash drawer at the start of the night and close that same cash drawer at the end of their shift. This responsibility simplifies the process if the cash drawer is over- or under-filled with cash at the end of the shift. The use of physical, mechanical and electronic controls helps monitor and limit ownership...... middle of paper ...... the sale is made for a lesser amount. The goods were shipped to the wrong address and the sales price was changed to a higher amount and a higher commission on the item was paid, while the goods were with another employee. Another limitation of internal controls is the fact that some companies may not have the money or manpower to enable segregation of duties. If this happens, the internal controls in place will not be as effective. In conclusion, the objective of these guidelines and internal controls are to ensure the accuracy of a company's accounting reports and also to ensure that the company's assets are not misappropriated or misused by its employees . When properly followed and adhered to, internal controls allow companies to effectively protect their assets and provide accurate financial statements...