Create an account
a dishonest act by an employee that results in personal benefit to the employee at a cost to the
three main factors that contribute to fraudulent activity
2. financial pressure
The Sarbanes-Oxley Act (SOX)
all publicly traded U.S. corporations are required to maintain an adequate system of internal control and audits
consists of all the related methods and measures adopted within an organization to safeguard its assets, enhance the reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations
purpose of internal control 1
Safeguard a company's assets from employee theft, robbery, and unauthorized use
company employees who continuously evaluate the effectiveness of the company's internal control systems
a network of approvals by authorized individuals, acting independently, to ensure dis, a network of approvals by authorized individuals acting independently to ensure that all disbursements by check are proper
an authorization from prepared , An authorization form prepared for each expenditure in a voucher system
compares the bank's balance with the company's balance and explains any differences to make them agree
a written order signed by the depositor directing the bank to pay a specific sum of money to a designated receipt
short-term highly liquid investments that are readily convertible to cash and insensitive to changes in the market
Purpose of Internal Control 2
Enhance accuracy and reliability of the accounting records by reducing the risk of errors
(unintentional mistakes) and irregularities (intentional mistakes and misrepresentations) in the
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