chapter 7 - Chapter 7 Internal Control and Cash PRINCIPLES...

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Chapter 7 Internal Control and Cash
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Internal control Safeguards an organization’s assets Enhances the accuracy and reliability of accounting records PRINCIPLES OF INTERNAL CONTROL STUDY OBJECTIVE STUDY OBJECTIVE 1
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Establishment of responsibility : most effective when only one person is responsible for a given task Segregation of duties : the work of one employee should provide a reliable basis for evaluating the work of another employee Documentation procedures : documents provide evidence that transactions and events have occurred PRINCIPLES OF INTERNAL CONTROL Continued Continued
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Physical, mechanical, and electronic controls safeguarding of assets and enhancing accuracy and reliability of the accounting records Independent internal verification : reviewing, comparing, and reconciling information from two sources Other controls : bonding of employees who handle cash, rotating employee’s duties, and requiring employees to take vacations PRINCIPLES OF INTERNAL CONTROL Continued Continued
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chapter 7 - Chapter 7 Internal Control and Cash PRINCIPLES...

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