Businesses today are required to follow established guidelines and regulations when it comes to maintaining and reporting business transactions. The goal of these guidelines and regulations is to ensure the accuracy of company accounting reports and also to ensure that company assets are not misappropriated or misused by employees. Internal controls within a company fall into various categories; in this document I will discuss the establishment of accountability, physical, mechanical and electronic controls, segregation of duties and independent internal verification. In addition to internal controls, I will also discuss the acts of Congress that paved the way for current internal controls and the limitations of internal controls. The first elements I will talk about are the different types of internal controls. Internal controls used by companies include but are not limited to; establish accountability, using physical, mechanical and electronic controls, segregation of duties and independent internal verification. All of these internal controls work together to ensure that company resources are not misused by employees, as well as ensuring that financial reporting is as accurate as possible. The basis for establishing liability is to help eliminate the problem of not being able to find out which employee is responsible for a miscalculation. For example, a cashier is required to start a new cash drawer at the beginning of the night and close the same cash drawer at the end of the shift; This responsibility makes the process simple if the cash drawer has more or less money at the end of the shift. The use of physical, mechanical and electronic controls helps monitor and limit ownership......half the paper......selling at a lower amount. Merchandise was shipped to the wrong address and the sales price was changed to reflect that it was a higher amount and that a larger commission was paid on the item, all while the merchandise is in someone else's home employee. Another limitation of internal controls is the fact that some companies may not have the money or manpower to allow segregation of duties; if this happens, the internal controls put in place will not be as effective. In conclusion, the objective of these guidelines and internal controls are to ensure the accuracy of the company's accounting reports and also to ensure that company assets are not misappropriated or misused by its employees. When properly followed and respected, internal controls enable companies to effectively and efficiently safeguard company assets and provide accurate financial reporting.