Accg105 Lecture week 10 2009S3 Int

Accg105 Lecture week 10 2009S3 Int - Lecture Week 10...

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Lecture Week 10 Accg105 Introductory Financial Accounting
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Topics to cover this week: Principles of Internal Control Internal control over cash Bank Reconciliation Statement Accounting for receivables
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Principles of Internal Control The following internal control principles are followed to safeguard assets and enhance the accuracy and reliability of accounting records:
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Principles of Internal Control Establishment of responsibility Responsibility should be assigned to specific and competent individuals. There should be supervision to ensure compliance with procedures.
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Principles of Internal Control Segregation of duties 2 common applications: Responsibility for related activites should be assigned to different individuals. Responsibility for record-keeping and physical custody of assets should be assigned to different individuals.
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Principles of Internal Control Documentation procedures Documents provide evidence for past transactions. Documents should be: Pre-numbered Forwarded promptly for timely recording.
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Principles of Internal Control Physical, mechanical and electronic controls The use of the following controls is essential: Physical/ mechanical controls – to safeguard assets Electronic controls – to enhance the reliability and accuracy of accounting records.
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Principles of Internal Control Independent internal verification The 4 common forms are: Checking procedures facilitated by segregation of duties; Monitoring by a supervisor; Internal auditor verifying control procedures; and Rotating duties.
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Principles of Internal Control Limitations Cost – should not exceed benefit Human factor – could overcome some controls that are in place in the system Size – may be too small to implement an internal control principle
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Internal control over cash receipts – see p. 377 Internal control over cash payments – see pp.377-8 Make all payments using a bank account (cheques or EFT) rather than cash. All payments should be authorised
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This note was uploaded on 05/20/2010 for the course ACCOUTING 22 taught by Professor Mark during the Spring '10 term at SCA NC.

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Accg105 Lecture week 10 2009S3 Int - Lecture Week 10...

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