Exam2 - Flashcards - The flashcards are formatted for...

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

View Full Document Right Arrow Icon
Cash 1. Safeguards Assets 2. Encourages adherence to company policies 3. Promotes operational efficiency 4. Ensures accurate and reliable
Background image of page 1

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

View Full DocumentRight Arrow Icon
accounting records 5. Comply with legal requirements
Background image of page 2
Goals of internal controls: Most liquid asset; biggest temptation.
Background image of page 3

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

View Full DocumentRight Arrow Icon
External Auditor Audit
Background image of page 4
An examination by an outside part of a company’s financial statements, accounting systems, and internal controls. Independent; does not work for the company (must be a CPA).
Background image of page 5

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

View Full DocumentRight Arrow Icon
Assignment of Duties Internal Auditor
Background image of page 6
Employee of the business (need not be a CPA). Creates accountability because you know what your employees are doing.
Background image of page 7

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

View Full DocumentRight Arrow Icon
Audit Separation of Duties
Background image of page 8
Separate (1) operations and accounting; (2) asset custody and accounting Required by publically traded companies on a regular basis.
Background image of page 9

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

View Full DocumentRight Arrow Icon
Internal Auditor External Auditor
Background image of page 10
Come once a year; look at samples from internal audit. Catches what happens financially on a daily basis.
Background image of page 11

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

View Full DocumentRight Arrow Icon
Greater Collusion
Background image of page 12
Effort by two or more employees to override the system (no system is fool-proof). Benefits must be ____ that costs to implement an internal control.
Background image of page 13

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

View Full DocumentRight Arrow Icon
Bank Account Cash
Background image of page 14
An easy target of theft and/or fraud because of its liquidity. Keeps track of balance of cash in a particular account.
Background image of page 15

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

View Full DocumentRight Arrow Icon
Reconcile Accounting Records
Background image of page 16
Keep track of balance of cash account (i.e. checkbook balance). Companies need to ____ the value of cash per the bank account and per company records in order to determine the actual cash balance.
Background image of page 17

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

View Full DocumentRight Arrow Icon
Reconciling Reconciling
Background image of page 18
Protects against bank errors; safeguards against errors and/or embezzlements by company employees. Helps determine the correct cash balance which should be displayed in the company’s accounting records/ financial statements.
Background image of page 19

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

View Full DocumentRight Arrow Icon
Adjusted Book Balance Adjusted Bank Balance
Background image of page 20
Begin with the balance per the bank statement and add or subtract items that the company knows about, but which
Background image of page 21

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

View Full DocumentRight Arrow Icon
Image of page 22
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/30/2011 for the course ACG 2021 taught by Professor Hornik during the Fall '08 term at University of Central Florida.

Page1 / 80

Exam2 - Flashcards - The flashcards are formatted for...

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