ECON 0710 Lecture Notes - Lecture 8: Bank Statement, List Of The Shield Episodes, Bank Reconciliation
4 Apr 2016
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Purpose is to maintain public confidence and trust in the financial reporting of companies. Objectives to provide assurance that: assets are safeguarded and used for business purposes, business information is accurate, employees and managers comply with laws and regulations. Intentional act of deceiving an employer for personal gain: eg. Elements of internal control: control environment, risk assessment, control procedures, monitoring. Overall attitude of management and employees about importance of controls. Three factors that influence: management"s philosophy and operating style, the company"s organizational structure, the company"s personnel policies. Management should identify risks in customer requirements, competitive threats regulatory changes, and changes in econ factors. Assurance that business goals will be achieved: competent personnel, rotating duties, and mandatory vacations, separating responsibilities for related operations, separating operations, custody of assets and accounting, proofs and security measures. Used to locate weaknesses and improve controls. Includes employee behavior and the accounting system for indicators of control problems.
