Internal controls are policies and procedures implemented by an organization to ensure their financial reports are reliable, operations are efficient, and activities are compliant with applicable laws and regulations. Internal controls can be tested and validated by checking to see if specific process steps (such as approval signatures) were followed. Publicly traded companies are required to have robust internal controls and validate this in their annual finance statement report (10-K). The robustness of internal controls and their effectiveness also impacts the amount of testing that external auditors will do to attest to the accuracy of financial statements.