Ch7 slides - Fraud and Internal Control Fraud and Internal Control Fraud Dishonest act by an employee that results in personal benefit to the employee

7-1 Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. Fraud and Internal Control Fraud and Internal Control Fraud and Internal Control Fraud and Internal Control Fraud Three factors that contribute to fraudulent activity. Illustration 7-1

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7-2  All publicly traded U.S. corporations are required to maintain an adequate system of internal control .  Corporate executives and boards of directors must ensure that these controls are reliable and effective.  Independent outside auditors must attest to the adequacy of the internal control system.  SOX created the Public Company Accounting Oversight Board (PCAOB) . The Sarbanes-Oxley Act Fraud and Internal Control Fraud and Internal Control Fraud and Internal Control Fraud and Internal Control

7-3 Methods and measures adopted to: 1. Safeguard assets 2. Enhance accuracy and reliability of accounting records 3. Increase efficiency of operations 4. Ensure compliance with laws and regulations