Mgmt 200 Spring 2011 Chapter 4

Mgmt 200 Spring 2011 Chapter 4 - Cash and Internal...

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1 Cash and Internal Controls Chapter 4 ACFE Report Association of Certified Fraud Examiners US Corporation losses to Employees is estimated to be $1 trillion Asset most commonly targeted = cash Skimming, Embezzlement, Fraudulent Billing, etc. Fraudulent financial reporting Internal Control System To minimize fraud losses and reduce the incidence of errors, companies implement a set of procedures known as INTERNAL CONTROLS. • Prevention Controls • Detection Controls • IT Controls
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2 Regulatory Responses Sarbanes-Oxley Act of 2002 (SOX) Act of Congress intended to bring reform to corporate accountability and stewardship in response to corporate scandals. Section 404: Internal Control Assessment Internal Control Procedures • Segregation of duties • Proper authorizations Safeguarding assets and records (physical • Safeguarding assets and records (physical controls) • Reconciliations (verification) • Independent review and appraisal • Design and use of business documents Problem 4-1A The Carmike 8 Cinema is a modern theatre located close to a college campus. The cashier, located in a box office at the entrance to the theatre, receives cash from customers and operates a machine that ejects serially numbered tickets for each film. Customers then enter the theatre lobby where they can purchase refreshments at the
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This note was uploaded on 02/27/2012 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University.

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Mgmt 200 Spring 2011 Chapter 4 - Cash and Internal...

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