FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fourth Edition 7 Define fraud in addition to

FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fourth Edition 7 Define fraud in addition to www.phwiki.com

FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fourth Edition 7 Define fraud in addition to

Russell, Chris, Host has reference to this Academic Journal, PHwiki organized this Journal FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fourth Edition 7 Define fraud in addition to internal control. Identify the principles of internal control activities. Explain the applications of internal control principles to cash receipts. Explain the applications of internal control principles to cash disbursements. Prepare a bank reconciliation. Explain the reporting of cash. Discuss the basic principles of cash management. Identify the primary elements of a cash budget. Study Objectives

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Fraud in addition to Internal Control Cash Controls Use of a Bank Reporting Cash Managing in addition to Monitoring Cash Fraud, Internal Control, in addition to Cash Fraud The Sarbanes-Oxley Act Internal control Principles of internal control activities Limitations Cash receipts controls Cash disbursements controls Bank statements Reconciling the bank account Cash equivalents Restricted cash Basic principles Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. Fraud in addition to Internal Control SO 1 Define fraud in addition to internal control. Fraud Three factors that contribute to fraudulent activity. Illustration 7-1 All publicly traded U.S. corporations are required to maintain an adequate system of internal control. Corporate executives in addition to boards of directors must ensure that these controls are reliable in addition to effective. Independent outside auditors must attest to the adequacy of the internal control system. SOX created the Public Company Accounting Oversight Board (PCAOB). The Sarbanes-Oxley Act Fraud in addition to Internal Control SO 1 Define fraud in addition to internal control.

Methods in addition to measures adopted to: Safeguard assets. Enhance accuracy in addition to reliability of accounting records. Increase efficiency of operations. Ensure compliance with laws in addition to regulations. Fraud in addition to Internal Control SO 1 Define fraud in addition to internal control. Internal Control Five Primary Components: Control environment. Risk assessment. Control activities. In as long as mation in addition to communication. Monitoring. Fraud in addition to Internal Control SO 1 Define fraud in addition to internal control. Internal Control Establishment of Responsibility Control is most effective when only one person is responsible as long as a given task. Segregation of Duties Related duties should be assigned to different individuals. Documentation Procedures Companies should use prenumbered documents in addition to all documents should be accounted as long as . Principles of Internal Control Activities Fraud in addition to Internal Control SO 2 Identify the principles of internal control activities.

Physical Controls Illustration 7-2 Fraud in addition to Internal Control SO 2 Identify the principles of internal control activities. Principles of Internal Control Activities Independent Internal Verification Records periodically verified by an employee who is independent. Discrepancies reported to management. Human Resource Controls Bond employees. Rotate employees’ duties in addition to require vacations. Conduct background checks. Fraud in addition to Internal Control SO 2 Identify the principles of internal control activities. Principles of Internal Control Activities

Limitations of Internal Control Costs should not exceed benefit. Human element. Size of the business. Fraud in addition to Internal Control SO 2 Identify the principles of internal control activities.

Illustration 7-4 Cash Receipts Controls Cash Controls SO 3 Cash Receipts Controls Cash Controls SO 3

SO 3 Explain the applications of internal control principles to cash receipts. Illustration 7-5 Important internal control principle—segregation of record-keeping from physical custody. Cash Receipts Controls Over-the-Counter Receipts Cash Receipts Controls Mail Receipts: Mail receipts should be opened by two people, a list prepared, in addition to each check endorsed. Each mail clerk signs the list to establish responsibility as long as the data. Original copy of the list, along with the checks, is sent to the cashier’s department. Copy of the list is sent to the accounting department as long as recording. Clerks also keep a copy. SO 3 Explain the applications of internal control principles to cash receipts. Permitting only designated personnel to h in addition to le cash receipts is an application of the principle of: a. segregation of duties. b. establishment of responsibility. c. independent check. d. other controls. Review Question Cash Controls SO 3 Explain the applications of internal control principles to cash receipts.

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Generally, internal control over cash disbursements is more effective when companies pay by check, rather than by cash. Applications: Voucher system Petty cash fund Cash Controls SO 4 Explain the applications of internal control principles to cash disbursements. Cash Disbursements Controls Cash Controls Cash Disbursements Controls Illustration 7-6 SO 4 Cash Controls Cash Disbursements Controls Illustration 7-6 SO 4

The use of prenumbered checks in disbursing cash is an application of the principle of: a. establishment of responsibility. b. segregation of duties. c. physical, mechanical, in addition to electronic controls. d. documentation procedures. Review Question Cash Controls SO 4 Explain the applications of internal control principles to cash disbursements. Voucher System Network of approvals, by authorized individuals, to ensure all disbursements by check are proper. A voucher is an authorization as long as m prepared as long as each expenditure. Cash Controls SO 4 Explain the applications of internal control principles to cash disbursements. Cash Disbursements Controls

Which of the following is the correct accounting under IFRS as long as cash Cash cannot be combined with cash equivalents. Restricted cash funds may be reported as a current or non-current asset depending on the circumstances. Restricted cash funds cannot be reported as a current asset. Cash on h in addition to is not reported on the balance sheet as Cash. The Sarbanes Oxley Act of 2002 applies to: all U.S. companies listed on U.S. exchanges. all companies that list stock on any stock exchange in any country. all European companies listed on European exchanges. Both (a) in addition to (c). “Copyright © 2011 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request as long as further in as long as mation should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies as long as his/her own use only in addition to not as long as distribution or resale. The Publisher assumes no responsibility as long as errors, omissions, or damages, caused by the use of these programs or from the use of the in as long as mation contained herein.” Copyright

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