INTERNAL CONTROL AND CASH Friday, we will meet in room 217 CHAPTER 7.

Slides:

Advertisements

Similar presentations

Chapter 7 Control and AIS Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-1.

Advertisements

Auditing Concepts.

The Internal Control Structure. The Relationship between Risks, Opportunities, and Controls Risks –A risk is any exposure to the chance of injury or loss.

Section 34.2 Handling Business Risks

Identify the key elements of a strong system of internal control.

6-1 Full and Fair Reporting Electronic Presentation by Douglas Cloud Pepperdine University Chapter F6.

Sarbanes-Oxley Act. 2 What Is It? Act passed by Congress in response to the recent and continuing corporate scandals. Signed into law July 30, Established.

1 Sarbanes-Oxley Section 404 June 29,  SOX 404 Background 3  SOX 404 Goals 4  SOX 404 Requirements 5  SOX 404 Assertions 6  SOX 404 Compliance.

Chapter 7 Control and AIS Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 7-1.

Internal Control Pertemuan 05 s.d 06 Matakuliah: F0712 / Lab Sistem Informasi Akuntansi Tahun: 2007.

Chapter 12 Auditing the Human Resource Management Process McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved.

Internal Control. COSO’s Framework Committee of Sponsoring Organizations 1992 issued a white paper on internal control Since this time, this framework.

Internal Control. COSO’s Framework Committee of Sponsoring Organizations 1992 issued a white paper on internal control Since this time, this framework.

Chapter 4 IDENTIFYING RISKS AND CONTROLS IN BUSINESS PROCESSES.

Forensic Accounting. Agenda Definition History Skills Business scandals Cases.

CASH CONTROLS AT OSU. WHAT IS “CASH”? Currency, coin, and cash equivalents: Checks Traveler’s checks Cashier’s checks Credit card records EFTs: ACH and.

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 12-1 Chapter Twelve Auditing the Human Resource Management Process.

© 2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Accounting Information & Reporting Systems by A. Aseervatham & D. Anandarajah. Slides prepared by Kaye Watson.

Chapter 8 Introduction to Internal Control Systems

ACCOUNTING INFORMATION SYSTEMS

WEYGANDT. KIESO. KIMMEL. TRENHOLM. KINNEAR. BARLOW. ATKINS PRINCIPLES OF FINANCIAL ACCOUNTING CANADIAN EDITION Chapter 7 Internal Control and Cash Prepared.

Chapter 8 – Sarbanes-Oxley, Internal Control, and Cash

Chapter Four Internal Controls, Accounting for Cash, and Ethics © 2015 McGraw-Hill Education.

Introduction to Internal Control Systems

Implementation Issues of Sarbanes-Oxley CASE Presentation September 23, 2004 By Denise Farnan.

BusinessAllstars.com 1 BusinessAllstars.com Presents Copyright © 2004 by Gainbridge Associates All right reserved This material may not be used or reproduced.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood 4 – 1 Transaction Processing and the Internal Control.

John Wiley & Sons, Inc. © 2005 Chapter 7 Internal Control and Cash Prepared by Barbara Muller Arizona State University West Principles of Accounting Kimmel.

Internal Control and Managing Cash

Scandals (in the public and private sector)  Enron  Worldcom  Livent  Nortel  HRDC  Sponsorship Scandal.

Chapter 4: Internal Controls, Accounting for Cash, and Ethics

Internal Controls and Fraud Convery Describe an Internal Controls System and its elements Identify specific Internal Control issues in a NPO Consider.

OH 9-1 Protecting Revenue 10 OH 9-1. OH 9-2 Learning Objectives After completing this chapter, you should be able to: Identify and explain the three parts.

Internal Control and Accounting for Cash Chapter Six McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

1 Internal Control and Managing Cash Chapter 4. 2 Learning Objective 1 Set up an effective system of internal control.

Ensuring the Integrity of Financial Information Ensuring the Integrity of Financial Information C H A P T E R 5.

Cash Control and Banking Activities Making Accounting Relevant Businesses deposit all cash and checks into a bank account and make payments using checks.

COPYRIGHT © 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.

INTERNAL CONTROL AND CASH

Chapter 15 Debt and Equity Capital McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 9: Introduction to Internal Control Systems

APA – Fundamentals of Payroll Chapter 2 – Payroll Systems March 10, 2012.

Auditing Internal Control Studies & Risk Assessment Chapter 9 Internal Control Studies & Risk Assessment Chapter 9.

PRINCIPLES OF FINANCIAL ACCOUNTING CHAPTER 7. Internal Control Insists of rules to: Safeguard assets Enhance Accuracy and reliability of its accounting.

INTERNAL CONTROL AND CASH CHAPTER Identify the principles of internal control activities 2. Explain the activities that help achieve internal control.

Case 6.2 Waste Management Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent.

Financial Management & Internal Control for Utility Companies Julia Barber, CPA and Sherman, Barber & Mullikin, CPAs Madison, IN

5 Accounting Careers Austin May 11 December nd Period.

McGraw-Hill/Irwin © The McGraw-Hill Companies 2010 Auditing the Human Resource Management Process Chapter Twelve.

7-1 FRAUD, INTERNAL CONTROL, AND CASH 7 Remember… people will lie, cheat and steal! Not everybody…. and not all the time.… but they do….

©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder Section 404 Audits of Internal Control and Control Risk Chapter 10.

Internal Control and Accounting for Cash Chapter Six McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Board Financial Oversight Governing Board Online Training Module.

Chapter Four Internal Controls, Accounting for Cash, and Ethics © 2015 McGraw-Hill Education.

Presented by: Sharon Pender Louisiana State PTA Treasurer.

Lecture 5 Control and AIS Copyright © 2012 Pearson Education 7-1.

Chapter 12 Auditing the Human Resource Management Process Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution.

Chapter 12 Auditing the Human Resource Management Process McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved.

Internal Control and CASH BY JUDITH PAQUETTE. Learning Objectives  Learn the elements of Internal Control  Discuss the role of Internal Control in a.

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Six Internal Control and Accounting for Cash.

Risk Management Dr. Clive Vlieland-Boddy. Managements Responsibilities Strategy – Hopefully sustainable! Control – Hopefully maximising profits! Risk.

Modern Auditing: Assurance Services and the Integrity of Financial Reporting, 8th Edition William C. Boynton California Polytechnic State University at.

Internal Control and Managing Cash

Auditing Concepts.

The Demand for Audit and Other Assurance Services

ACCOUNTING INFORMATION SYSTEMS

Chapter 7 Internal Control and Cash

Defining Internal Control

Unit 11 October 22, 2017.

Internal Controls The comments made by the presenter represent the presenter’s opinions only; these comments and opinions do not necessarily represent.

Presentation transcript:

INTERNAL CONTROL AND CASH Friday, we will meet in room 217 CHAPTER 7

Internal Review: In large companies, controal activities (including internal review) are monitored by internal auditors. Internal Auditors are company employees who evaluate the internal control system of the company. (whether the system is effective) They periodically review the activities of departments and individuals to determine whether the correct control activities are being followed. Performance Review

Internal Review: Internal Review have become so important that CEO and CFO must certify that they have evaluated the effectiveness of the company’s internal control over financial reporting. Their conclusions must be included in the company’s management discussion and analysis section of the annual report. (disclosure note) Performance Review

External Review : Internal auditors work for the same company they review, but external auditors do not work for the company they review but typically work for CA firms. External auditors focus on making sure that financial statements fairly present the company’s financial position. (also whether the company is complying with IFRS rules.) Performance Review

External Review : All public companies (their shares are traded in stock exchange) are required to have an external audit. Auditors check, verify and audit (tracing and vouching) the books of the client. This is why accounting firms make millions of dollars. Performance Review

1. Bonding of employees who handle cash: Bonding means getting insurance called fidelity insurance. If one of the employee steals money (or asset) then the insurance compay will compensate the employer for losses due to dishonesty of an employee. When employees know that the company has fidelity insurance, they will think twice before stealing company’s asset because the insurance company will prosecute all criminals. Other Controls

2. Rotating employees’ duties and requiring employees to take vacations. These measures discourage employees from attempting any thefts since they will not be able to permanently hide their improper actions. Many bank embezzlements, for example, have been discovered when the guilty employee was on vacation. Other Controls

LIMITATIONS OF INTERNAL CONTROL Cost / Benefit No matter how well it is designed and operated, a company’s system of internal control can only give reasonable assurance that assets are properly safeguarded and that accounting records are reliable. The concept of reasonable assurance is based on the belief that the cost of control activities should not be more than their expected benefit. Cost < Benefit then they will implement the internal control system. For example, security guard at Wal-Mart Cost is a year > benefit of then we Will not hire him or her.

LIMITATIONS OF INTERNAL CONTROL Collusion Two or more employees may work together to get around controls. Such collusion eliminates the protection which is offered by segregation of duties.

LIMITATIONS OF INTERNAL CONTROL Size of business Size of the business may also limit internal control. For example, in small companies, it is difficult to segregate duties or have independent performance reviews. This is why in small business, the owner does internal review and many other functions.

LIMITATIONS OF INTERNAL CONTROL Human element Human factor is an important limit in internal control system. A good system can become ineffective as a result of employee fatigue, carelessness, indifference and lack of training.

Classwork / Homework P378 Ex 7.1 P379 Ex 7.2 P383 P7.1