AC 211 Lecture 9: Fraud, Internal Control, and Cash (Part 1)
Document Summary
An attempt to deceive others for personal gain. Corruption involves misusing one"s position for inappropriate personal gain. Financial statement fraud involves misreporting amounts in the financial statements, usually to portray more favorable financial results than what actually exist. Loan covenants: terms of a loan agreement that, if broken, entitle the lender to renegotiate terms of the loan, including its due date. A set of laws established to strengthen corporate reporting in the united states. All companies that trade on u. s. stock exchanges must comply with requirements of sox. Establish an audit committee of independent directors. Evaluate and report on the effectiveness of internal control over financial reporting. Internal controls: processes by which a company provides reasonable assurance regarding the reliability of the company"s financial reporting, the effectiveness and efficiency of its operations, and its compliance with applicable laws and regulations. Control environment refers to the attitude that people in the organization hold regarding internal control.
