Chapter 7 - Fraud, internal control, and cash. After studying this chapter, you should be able to: Define fraud and the principles of internal control, apply internal control principles to cash, identify the control features of a bank account, explain the reporting of cash and the basic principles of cash management. | FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fifth Edition 7 After studying this chapter, you should be able to: Define fraud and internal control. Identify the principles of internal control activities. Explain the applications of internal control principles to cash receipts. Explain the applications of internal control principles to cash disbursements. Prepare a bank reconciliation. Explain the reporting of cash. Discuss the basic principles of cash management. Identify the primary elements of a cash budget. Learning Objectives Preview of Chapter 7 Accounting Fifth Edition Kimmel Weygandt Kieso Fraud and Internal Control Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. LO 1 Define fraud and internal control. Three factors that contribute to fraudulent activity. Illustration 7-1 Fraud Applies to publicly traded . corporations. Required to maintain a 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). LO 1 Define fraud and internal control. Fraud and Internal Control The Sarbanes-Oxley Act Methods and measures adopted to: Safeguard assets. Enhance accuracy and reliability of accounting records. Increase efficiency of operations. Ensure compliance with laws and regulations. LO 1 Define fraud and internal control. Internal Control Fraud and Internal Control Five Primary Components: Control environment. Risk assessment. Control activities. Information and communication. Monitoring. LO 1 Define fraud and internal control. Fraud and Internal Control Internal Control Establishment of Responsibility Control is most effective when only one person is responsible for a given task. Establishing responsibility often requires limiting access only to authorized personnel, and then . | FRAUD, INTERNAL CONTROL, AND CASH Accounting, Fifth Edition 7 After studying this chapter, you should be able to: Define fraud and internal control. Identify the principles of internal control activities. Explain the applications of internal control principles to cash receipts. Explain the applications of internal control principles to cash disbursements. Prepare a bank reconciliation. Explain the reporting of cash. Discuss the basic principles of cash management. Identify the primary elements of a cash budget. Learning Objectives Preview of Chapter 7 Accounting Fifth Edition Kimmel Weygandt Kieso Fraud and Internal Control Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. LO 1 Define fraud and internal control. Three factors that contribute to fraudulent activity. Illustration 7-1 Fraud Applies to publicly traded . corporations. Required to maintain a system of internal control. Corporate executives and boards of directors .
