Chapter 4.pdf - ACCT 2101 Principles of Accounting I...

This preview shows page 1 - 2 out of 3 pages.

ACCT 2101 Principles of Accounting I1Chapter 4: Cash and Internal ControlsInternal ControlsFinancial Accounting MisstatementsErrors—accidental errors in recording transactions or applying accounting principlesFraud—a person intentionally deceives another person for personal gain or to damagethat personThe Fraud TriangleOpportunity — the situation allows the fraud to occurMotivation — someone feels the need to commit fraud, such as the need for moneyRationalization — justification for the deceptive act by the one committing the fraudAccounting scandals in the early 2000s prompted passage of the Sarbanes-Oxley Act (SOX)Enron and WorldcomSOX required better internal controlsInternal controls attempt to eliminate the opportunity element of fraudSafeguard the company’s assetsImprove the accuracy and reliability of accounting informationMonitoring: Continual monitoring of internal activities and reporting of deficiencies isrequired. Monitoring includes formal procedures for reporting control deficiencies.Control activities are the policies and procedures that help ensure that management’s

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 3 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
turner

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture