Final answer:
The principles of internal control include performing regular and independent reviews, separating recordkeeping from custody of assets, applying technological controls, maintaining adequate records, and establishing responsibilities. Matching revenues with expenses and recording assets at cost are accounting principles, not internal control principles.
Step-by-step explanation:
The principles of internal control are essential for ensuring the integrity and accuracy of financial records and safeguarding assets within an organization. Among the options provided, the correct principles of internal control include:
- Perform regular and independent reviews to ensure that policies and procedures are being followed and to identify any areas for improvement.
- Separate recordkeeping from custody of assets to minimize the risk of errors or fraud. This principle requires that the individuals who are responsible for maintaining the accounting records are different from those who have physical custody of the organization's assets.
- Apply technological controls which include the use of passwords, backups, and other information technology measures to protect assets and information.
- Maintain adequate records to ensure that all transactions are properly recorded and that financial statements can be accurately prepared.
- Establish responsibilities to ensure that duties are clearly defined within the organization, which helps in accountability and prevention of fraud.
The other options provided, such as 'Match revenues with expenses in the same accounting period' and 'Record assets at cost' are accounting principles rather than internal control principles. 'Insure assets' is a risk management strategy, but not strictly a principle of internal control.
Complete Question:
Identify the principles of internal control by selecting the correct answers below. (Check all that apply.)
Multiple select question.
Perform regular and independent reviews.
Match revenues with expenses in the same accounting period.
Record assets at cost.
Insure assets.
Separate recordkeeping from custody of assets.
Apply technological controls.
Maintain adequate records.
Establish responsibilities.