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Unformatted text preview: Chapter 6: Accounting for Cash and Internal Controls PURPOSE OF INTERNAL CONTROL 1) Protect Assets 2) Ensure Reliable Accounting 3) Promote Efficient Opperations 4) Urge Adherence to Company Policies SARBANES- OXLEY ACT Aka SOX, requires management and auditors of publicly held companies to adhere to or perform specific requirements, such as evaluation of internal controls, auditor’s work is overseen by the Public Company Accounting Oversight Board (PCAOB), restriction on consulting services performed by auditors, term limits on person leading the audit, harsh penalties for violators, including prison time with severe fines PRINCIPLES OF INTERNAL CONTROL 1) Establish responsibilities 2) Maintain adequate records 3) Insure assets and bond key employees 4) Separate recordkeeping from custody of assets 5) Divide responsibility for related transactions 6) Apply technological controls 7) Perform regular and independent reviews TECHNOLOGY AND INTERNAL CONTROL Reduced processing errors, limited evidence of processing, increased e-commerce, more extensive testing of...
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This note was uploaded on 02/22/2012 for the course ACC 151 taught by Professor Franklin during the Fall '08 term at Syracuse.
- Fall '08