Internal Control in addition to Cash Fraud Types of Fraud Fraud Triangle Internal Control

Internal Control in addition to Cash Fraud Types of Fraud Fraud Triangle Internal Control www.phwiki.com

Internal Control in addition to Cash Fraud Types of Fraud Fraud Triangle Internal Control

Stein, David, Host has reference to this Academic Journal, PHwiki organized this Journal Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Internal Control in addition to Cash Chapter 4 Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Describe fraud in addition to its impact Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

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Fraud Intentional misrepresentation of facts Causes injury or damage to another party Large problem that increases each year Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Types of Fraud Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Fraud Triangle Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Explain the objectives in addition to components of internal control 11 Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Internal Control Primary way fraud in addition to errors are: Prevented Detected or Corrected Management in addition to Board of Directors implements a: Plan of organization System of procedures Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Objectives of Internal Control Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Sarbanes-Oxley Act (SOX) Federal law requiring public companies to have system of internal controls Auditors examine controls in addition to issue reports on reliability Provisions: Require internal control report by companies Create Public Company Accounting Oversight Board Limit non-audit services of auditing firms Penalize violators Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Shield of Internal Control Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Internal Controls Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Components of Internal Control Control Procedures Monitoring In as long as mation System Control Environment Risk Assessment

Control Environment Tone at the top Key ingredient Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Risk Assessment Identify business risks Establish procedures to deal with risks Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. In as long as mation System in addition to Control Procedures In as long as mation System How accounting in as long as mation enters in addition to exits company System must capture, process in addition to report transactions accurately Control procedures Built in control environment in addition to in as long as mation system How companies meet five objectives of internal control Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Monitoring Controls Prohibit one employee from process transaction completely Program controls into computerized system Hired auditors to monitor controls Internal – monitor from the inside to safeguard assets External – test from the outside to ensure accounting records are accurate Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Internal Control Procedures Smart Hiring Practices Separation of Duties Asset h in addition to ling Record keeping Transaction approval Comparison in addition to Compliance Monitoring Operating in addition to cash budgets Audits Manual or computer checks Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Internal Control Procedures Adequate Records Hard copy or electronic Limited Access Assets by custodians Records by accounting department Proper Approvals The larger the transaction, the more specific approval Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

SCALP Smart hiring practices in addition to segregation of duties Comparisons in addition to compliance monitoring Adequate records Limited access Proper approvals Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. In as long as mation Technology (IT) Accounting systems rely on more than ever be as long as e Examples: Inventory sensors Barcode scanning Basic attributes of internal control do not change Procedures to implement are different Use of computers can greatly improve speed in addition to accuracy Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Safeguard Controls Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Internal Controls as long as E-Commerce Pitfalls of e-commerce Stolen credit card numbers Computer viruses in addition to Trojan Horses Phishing expeditions Security measures Encryption Firewalls Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Costs in addition to Benefits of Internal Control Ways good internal control can be circumvented Collusion Management override Fatigue & negligence The stricter the internal control, the more it costs The benefits should outweigh the costs Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Bank Account as Control Device Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

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Design in addition to use a bank reconciliation Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Bank Account Documents Signature card Deposit ticket Check Maker Payee Bank Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. The Bank Statement Reports: Cash receipts Cash payments Electronic Funds Transfer (EFT) Make payments by electronic communication Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Bank Reconciliation Two records of a business’s cash Amounts are usually different Time lags in recording transactions Bank reconciliation explains differences Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Bank Side of the Reconciliation Deposits in transit Outst in addition to ing checks Bank errors Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall. Book Side of the Reconciliation Bank collections Electronic Funds Transfers (EFT) Service charges Interest revenue NSF checks Cost of printed checks Book errors Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Copyright ©2012 Pearson Education Inc. Publishing as Prentice Hall.

Stein, David Host

Stein, David is from United States and they belong to David Stein Show and they are from  Scottsdale, United States got related to this Particular Journal. and Stein, David deal with the subjects like Entertainment; Sports

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