ACCT 2001 Chapter : ACCT 2001 Chapter 7 Class Notes
Document Summary
Chapter 7 notes: 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 bank reconciliation. Dishonest act by an employee that results in personal benefit to the employee at a cost to the employer. All publicly traded u. s corporations are required to maintain an adequate system of internal controls. Corporate executives and boards of directors must ensure that these controls are reliable and effective. Independent auditors must attest to the adequacy of the internal control system. Sox created the public company accounting oversight board (pcaob). Internal control: safeguard assets, enhance accuracy and reliability of accounting records, increase efficiency of operations, ensure compliance with laws and regulations. Crime : control environment, risk assessment, control activities, information and communication, monitoring. Principles of internal control activities: establishment of responsibility.