WRD_ch08 - 8-18Sarbanes-Oxley, Internal Control, and...

Info iconThis preview shows pages 1–22. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 8-18Sarbanes-Oxley, Internal Control, and CashSarbanes-Oxley, Internal Control, and Cash1Describe the Sarbanes-Oxley Act of 2002 and the impact on internal controls and financial reporting.2Describe and illustrate the objectives and elements of internal control.3Describe and illustrate the application of internal controls to cash.After studying this chapter, you should be able to:8-2Sarbanes-Oxley, Internal Control, and Cash (continued)5Describe and illustrate the use of a bank reconciliation in controlling cash.6Describe the accounting for special-purpose cash funds.7Describe and illustrate the reporting of cash and cash equivalents in the financial statements.4Describe the nature of a bank account and its use in controlling cash.8-39-4Describe the Sarbanes-Oxley Act of 2002 and its impact on internal controls and financial reporting.18-48-5The Sarbanes-Oxley Act of 2002(referred to simply as Sarbanes-Oxley) applies only to companies whose stock is traded on public exchanges. Its purpose is to restore public confidence and trust in the financial statements of companies. 18-6Sarbanes-Oxley requires companies to maintain strong and effective internal control.18-7Internal controlis broadly defined as the procedures and processes used by a company to:1.Safeguard its assets.1.Process information accurately.1.Ensure compliance with laws and regulations.18-818-91Sarbanes-Oxley Report of NikeExhibit 18-10Describe and illustrate the objectives and elements of internal control.28-108-1128-12Employee fraudis the intentional act of deceiving an employer for personal gain.28-131.Control environment2.Risk assessment3.Control procedures4.Monitoring5.Information and communicationManagement is responsible for designing and applying five elements of internal control to meet the three internal control objectives. These elements are as follows:Five Elements of Internal Control28-14Elements of Internal ControlExhibit 228-15Thecontrol environmentis the overall attitude of management and employees about the importance of controls.2Control Environment8-161.Managements philosophy and operating style2.The companys organizational structure3.The companys personnel policiesFactors That Influence the Control Environment28-1728-181.Competent personnel, rotating, duties, and mandatory vacations.2.Separating responsibilities for related operations.3.Separating operations, custody of assets, and accounting.4.Proofs and security measures.Control Procedures28-19Exhibit 3Internal Control Procedures28-20Monitoring the internal control system is used to locate weaknesses and improve controls.2Monitoring8-21Monitoring often includes observing employee behavior and the accounting system for indicators of control problems....
View Full Document

This note was uploaded on 11/29/2010 for the course CIS 127 taught by Professor King during the Spring '10 term at University of West Georgia.

Page1 / 78

WRD_ch08 - 8-18Sarbanes-Oxley, Internal Control, and...

This preview shows document pages 1 - 22. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online