ACG 2021 Lecture Notes - Lecture 5: General Ledger, Fraud, Internal Control
Document Summary
Chapter 4: name of movie/show that was used as an example for internal controls in the lecture. Seinfeld: name of one of the firms that are included in the top ten largest accounting frauds. Unqualified: t/f: when reconciling a bank statement, journal entries can be completed on the back side of the reconciliations. So what(cid:859)s the pro(cid:271)le(cid:373): performance measures drive behavior, sometimes linked to incentive compensation, sometimes result in unintended consequences. Part a - fraud and internal controls: internal controls for(cid:373)al pro(cid:272)edures to safeguard the (cid:272)o(cid:373)pa(cid:374)y(cid:859)s assets and improve the accuracy and reliability of accounting info. Sarbanes-oxley act of 2002: passed by congress, applies to all companies required to file financial statements w/ sec, established guidelines related to internal control procedures + auditor- client relations, made companies have to sign for internal controls. Control environment: tone at the top sets overall ethical tone of the company, i(cid:374)(cid:272)ludes for(cid:373)al poli(cid:272)ies related to (cid:373)a(cid:374)age(cid:373)e(cid:374)t(cid:859)s philosophy, assig(cid:374)(cid:373)e(cid:374)t of responsibilities, and organizational structure.
