Perth Teach Ltd. (PTL,) started the business of manufacturing of cycles and cycle parts in Ludhiana in year 2016 and achieved good success since then. It manufactures and exports cycles of all categories of sports. PTL.

Perth Teach Ltd. (PTL,) started the business of manufacturing of cycles and cycle parts in Ludhiana in year 2016 and achieved good success since then. It manufactures and exports cycles of all categories of sports. PTL. provides job work services also for auto components manufacturing companies. The company keeps launching of new products to expand its reach. Internal audit team has worked brilliantly over the last two financial years and has ensured that non-compliances are very rare and controls are operating effectively. Documents of internal auditor includes the details of controls implemented at various levels as below: Sr No. Controls Implemented Control Classification/Type 1 Segregation of duties, Background verification, Internal audits, Data Validation, monitoring quality controls Preventive 2 Firewalls, Computer and server backups, reconciliations, audit trail, obtaining feedback Detective 3 Prior approvals, financial reporting, physical verification, data verification Input 4 Review of exception reports, Authorization procedure, financial statements, rotation of jobs Output You are required to explain why internal controls should exist in an organization and comment whether the above table represents the correct classification of controls.