What are internal controls designed to achieve?

Internal controls are essential mechanisms established within an organization to ensure the integrity and reliability of financial reporting, while also protecting a company’s assets. They are structured to minimize the risk of errors and fraud, ensuring that financial statements accurately reflect the company's financial position and performance. By maintaining robust internal controls, a company can effectively track and manage its resources, enhance accountability among employees, and foster a transparent operational environment.

These controls include procedures such as authorization of transactions, segregation of duties, regular audits, and reconciliations, which help ensure that financial records are both accurate and compliant with applicable laws and standards. Thus, safeguarding the company's assets directly contributes not only to the accuracy of financial reporting but also to maintaining stakeholder confidence in the organization’s integrity.

The other options focus on areas outside the primary objectives of internal controls. While increasing profit margins, managing employee performance, and creating marketing strategies are all important business considerations, they do not align with the primary purpose of internal controls, which is to protect assets and ensure precise financial reporting.