Companies must have “internal control” to maintain principles and limits. Internal controls are in place to help protect the company against theft, theft and unauthorized use and to improve the correctness and reliability of its accounting records by minimizing errors and ensuring that it does not There are no unknown patterns in the accounting process. All U.S. companies are required to have an adequate system of internal controls due to the Sarbanes-Oxley Act of 2002, otherwise companies will be subject to fines and company executives may be imprisoned if they fail to comply. do not comply with it. The Sarbanes-Oxley Act of 2002 (SOX) was implemented because all the corporate scandals of recent years were uncovered. SOX was put in place because it requires companies to pay more attention to internal controls. This system imposes corporate responsibilities on company executives and boards of directors to ensure that companies' internal controls are effective and reliable and, in less than one part of the law, companies must develop sound financial reporting control principles. Companies must continually develop and verify sound financial reporting control principles and that the system is in working order. Independent external auditors must attest to the level of internal control. In addition, SOX also developed the Public Company Accounting Oversight Board (PCAOB) which now establishes auditing standards and regulates the activity of auditors. Some company executives have complained about the expense and time required to comply with the requirements, but 60% of investors believe it is a good system and would not invest in a company that does not comply with SOX. If a company announces that it has...... the middle of paper elements of internal control are:• Establishment of responsibilities• Segregation of duties• Documentation procedures• Physical, mechanical and electronic controls• Independent internal audit• Other controls such as creating links and requiring employees to take vacation or change positions. By using the principles of internal control, companies can protect their assets and improve the accuracy and reliability of accounting records by following specific control principles. These measures may vary depending on the size and nature of the business as well as management's control philosophy. Independent internal audit involves reviewing data prepared by employees. Companies must verify records or on a surprise basis and the independent staff employee must be responsible for the information and follow up on verifications..