In Reader's Digest's 1996 Annual Report, under Report of Management, the chairman and chief executive officer and the executive vice president and chief financial officer stated: The company maintains a system of internal accounting controls designed to provide reasonable assur- ance. at reasonable cost, that transactions and events are recorded properly and that assets are safeguarded. The internal control system is supported by written policies and procedures and by the careful selection, training, and supervision of qualified personnel, and is monitored by an internal audit function. What is the purpose of this statement? To which basic elements of the internal control structure does the statement refer?