Final answer:
Organizations use internal control processes to avoid errors and fraud. These processes include segregating duties, regular audits, and strict compliance with laws. The aim is to protect assets and ensure the accuracy of financial information.
Step-by-step explanation:
Organizations implement internal control processes into their work steps to avoid errors and fraud. These processes are crucial for maintaining the integrity of a company's financial and administrative operations.
Internal controls are the procedures set up to ensure that assets are protected and that financial information is accurate and reliable.
Firms may establish various forms of controls, including segregating duties (ensuring more than one person is responsible for the recording and processing of a transaction), implementing permission-based access to sensitive information, carrying out regular audits, and adopting uniform policies for handling documents and transactions.
An audit is another essential process to assess the effectiveness of internal controls and to detect any instances of fraud or error within an organization. Through audits, independent reviewers can provide an unbiased opinion about the fairness and accuracy of a company's financial statements.
Finally, compliance with relevant laws and regulations is another area where organizations must ensure strict adherence to avoid legal repercussions and maintain credibility in their operations.