Accounting
In addition to relying on independent accountants to review its financial information, a company may rely on its internal control system to monitor business activities, in the hope of reducing the likelihood of error and instances of fraudulent behavior. An effective internal control system should incorporate the following principles:

1. clear identification of the individuals responsible for performing particular tasks, to increase their degree of accountability.
2. adequate recordkeeping.
3. insurance for expensive assets, and bonding for employees who transfer large amounts of cash, so an insurance policy will cover losses if they steal.
4. Separation between the responsibility for handling assets and for recordkeeping for those assets.
5. Division of responsibility for transactions among several individuals or departments.
6. Technological controls to reduce mechanical and mathematical errors.
7. Regular reviews by internal auditors, along with external auditors, to ensure financial statements accurately present company information.

While independent auditors or accountants may reduce the likelihood of error or fraud, effective internal controls also promote accuracy and ethical behavior among employees and independent auditors.

Source: K. Larson, J. Wild, and B. Chiappetta, Principles of Financial Accounting (New York: McGraw-Hill/Irwin, 2005), pp. 308–310.

State Codes of Ethics for CPAs
Remember from your accounting class that many state ethics codes require CPAs who audit financial statements to disclose areas in which those statements fail to comply with GAAP. Thus, one way accountants can reduce their liability for negligence is by making sure they are in compliance with their state code of ethics.