1. Learning Objective 1 Describe the Sarbanes-Oxley Act of 2002 and its impact on internal controls and financial reporting

2. Sarbanes-Oxley Act of 2002

3. Learning Objective 2 Describe and illustrate the objectives and elements of internal control

4. Objectives of Internal Control

5. Elements of Internal Control Control environment Risk assessment Control procedures Monitoring Information and communication

6. Control Environment

7. Risk Assessment Identifies risks so management can take steps to control them

8. Control Procedures

9. Monitoring Locates weaknesses and improves control effectiveness Includes on-going efforts and separate evaluations

10. Information and Communication Risk Assessment ControlEnvironment Monitoring ControlProcedures

11. Limitations of Internal Controls Human Elements Cost / Benefit of System

12. Learning Objective 3 Describe and illustrate the application of internal controls to cash

13. The Nature of Cash Coins Currency Checks Money Orders Money on Deposit

14. Cash Received from Sales

15. Cash Received in the Mail Remittance Advice Person Opening Mail CheckDeposit

16. Cash Received by EFT Company Bank Customer Bank

17. Control Over Cash Payments Voucher Check issued to vendor Approved voucher entered to System Invoice, Purchase Order, and Receiving Report

18. Learning Objective 4 Describe the nature of a bank account and its use for controlling cash

19. Nature of a Bank account and its use for controlling cash

20. Bank Statement Reconciliation

21. Steps in the Reconciliation Process

22. NetSolutions - Sales Transactions

23. End of Chapter 5