ch08 - 8 Fraud Internal Control and Cash Learning Objectives 8-1 1 Discuss fraud and the principles of internal control 2 Apply internal control

ch08 - 8 Fraud Internal Control and Cash Learning...

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8-1 Fraud, Internal Control, and Cash 8 Learning Objectives Discuss fraud and the principles of internal control. Apply internal control principles to cash. Identify the control features of a bank account. 3 Explain the reporting of cash. 2 1 4
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8-2 Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. Three factors that contribute to fraudulent activity. Illustration 8-1 Fraud triangle LO 1 LEARNING OBJECTIVE Discuss fraud and the principles of internal control. 1 Fraud
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8-3 Internal control consists of all the related methods and measures adopted within an organization to a) Safeguard assets. b) Enhance the reliability of accounting records. c) Increase efficiency of operations. d) Ensure compliance with laws and regulations. Internal Control LO 1
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8-4 Five Primary Components: A control environment. Risk assessment. Control activities. Information and communication. Monitoring. LO 1 Internal Control
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8-5 1. Establishment of responsibility 2. Segregation of duties 3. Documentation procedures 4. Physical controls 5. Internal auditors 6. Human resource control measures Principles of Internal Control Activities
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8-6 Control is most effective when only one person is responsible for a given task. Establishing responsibility often requires limiting access only to authorized personnel, and then identifying those personnel. Principles of Internal Control Activities LO 1 1. ESTABLISHMENT OF RESPONSIBILITY
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8-7 Different individuals should be responsible for related activities. The responsibility for record- keeping for an asset should be separate from the physical custody of that asset. LO 1 Principles of Internal Control Activities 2. SEGREGATION OF DUTIES
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8-8 Companies should use prenumbered documents, and all documents should be accounted for. Employees should promptly forward source documents for accounting entries to the accounting department. LO 1 Principles of Internal Control Activities 3. DOCUMENTATION PROCEDURES
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8-9 Illustration 8-2 LO 1 Principles of Internal Control Activities 4. PHYSICAL CONTROLS Physical controls relate primarily to the safeguarding of assets and include such measures as safes for the storage of cash prior to deposit,
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  • Winter '17
  • Dr. Mahwish Anjum
  • Fraud deterrence, Internal Control Activities

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