22207 : 22207 - Accounting for Business Decisions B
Document Summary
Internal controls the organisational plan & all related measures that an entity adopts to safeguard assets. Characteristics of an effective internal control system include: competent, reliable & ethical personnel, assignment of responsibilities, proper authorization, separation of duties. Separation of duties within the accounting function. Separation of the custody of assets from accounting. Separation of the authorization of transactions from the custody of related assets. Encryption is the primary method of achieving confidentiality in e-commerce encrypted message cannot be read by anyone who does not know the process (firewall) Companies spend as much as 0. 9% of you total sales. Most internal control measures can be circumvented or overcome. Collusion is when two or more employees work as a team with the purpose to defraud the firm. Documents used to control a bank account include: photo id, verifying signature, sms to mobile verification, internet banking passwords, bank statements, bank reconciliations. Two records of business cash: cash account, bank statement.
