BUSI 1101 Lecture Notes - Lecture 3: Electronic Funds Transfer, Bank Reconciliation, Internal Control
3 Mar 2018
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Learning objectives: example the components of an internal control system, including its control activities and limitations, apply the key control activities to cash receipts and payments, prepare a bank reconciliation, explain the reporting and management of cash. The systems adopted within a company to help it achieve: reliable financial reporting, effective and efficient operations, compliance with relevant laws and regulations. Also help prevent and detect errors, which cause unintentional misstatements. An effective way to prevent and detect fraud. Good internal control systems have five primary components: control environment, risk assessment, control activities, information and communication, monitoring activities. Control activities include: assignment of responsibility, segregation of duties, documentation, physical control, review and reconciliation. Specific control activities used by a company will depend on: the risks it is facing, and management s assessment, the size and nature of the company. An intentional act to misappropriate (steal) assets or to misstate financial statements.
