Chapter 6 - 6 CHAPTER Reporting and Analyzing Cash and...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Reporting and Analyzing Cash and Internal Controls C H A P T E R 6
Image of page 1

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

View Full Document Right Arrow Icon
Purpose of Internal Control Policies and procedures managers use to: Policies and procedures managers use to: 1. 1. Protect assets. Protect assets. 2. 2. Ensure reliable accounting. Ensure reliable accounting. 3. 3. Promote efficient operations. Promote efficient operations. 4. 4. Urge adherence to company policies. Urge adherence to company policies.
Image of page 2
Principles of Internal Control 1. 1. Establish responsibilities. Establish responsibilities. 2. 2. Maintain adequate records. Maintain adequate records. 3. 3. Insure assets and bond key employees. Insure assets and bond key employees. 4. 4. Separate recordkeeping from custody Separate recordkeeping from custody of assets. of assets. 5. 5. Divide responsibility for related transactions. Divide responsibility for related transactions. 6. 6. Apply technological controls. Apply technological controls. 7. 7. Perform regular and independent reviews. Perform regular and independent reviews.
Image of page 3

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

View Full Document Right Arrow Icon
Technology and Internal Control Reduced Processing Errors More Extensive Testing of Records Limited Evidence of Processing Crucial Separation of Duties Increased e-commerce
Image of page 4
Limitations of Internal Control Human Error Negligence Fatigue Misjudgment Confusion Human Fraud Intent to defeat internal controls for personal gain
Image of page 5

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

View Full Document Right Arrow Icon
Limitations of Internal Control The costs of internal controls must not exceed their benefits. Costs Benefits
Image of page 6
Control of Cash An effective system of internal control that protects cash and cash equivalents should meet three basic guidelines: Handling cash is separated from recordkeeping of cash.
Image of page 7

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

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern