Business Administration 2257 Chapter Notes - Chapter 7: Cash Cash, Debit Card, Internal Control

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Eleni Petrou

Document Summary

Internal control: consists of all the related methods and measures adopted within a company to help it achieve reliable financial reporting, ef ficient operations, and compliance with laws. Used to prevent/detect errors can give rise to unintentional misstatements in financial statements. Play key role in prevention and detection of intentional errors, misstatements, and stealing as result of such things as fraud. Good internal control systems have the following 5 primary components: Responsibility of management to make it clear that the organization values integrity and that unethical activity will not be tolerated. Companies must identify and analyze the various factors that create risk for business and determine how to best manage risks. Reduce the occurrence of unintentional and intentional errors, management must design policies and procedures to address the specific risks faced by the company. The internal control system must capture and communicate, all pertinent information to the appropriate internal and external users.