Business Administration 2257 Chapter Notes - Chapter 7: Internal Control, Financial Statement, Bank Statement

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Vicki Sweeney

Document Summary

Internal control system must capture and communicate all pertinent information to the appropriate internal and external users: monitoring. Internal control systems must be monitored periodically for their adequacy. Control activities vary depending on management"s assessment of risks. The size and nature of the company heavily influence the assessment. When the same person is responsible for related activities, the potential for errors increases. Reasonable assurance: bases on the belief that the costs of establishing control activities should not be more than their expected profit. Fraud: an intentional act to steal assets or misstate financial statements. Cash: coins, currency, cheques, money orders, and money on hand or on deposit in a bank. Does not include post dates cheques, stale dated cheques or returned cheques. Cash accounts for the bank are liabilities because the bank is only holding the cash for the company. The company can request it at any time. Assets are increased by debits and decreased by credits.