MGAB01H3 Chapter 7: Chapter 7 notes

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9 Jan 2011
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MGAB01H3 Full Course Notes
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MGAB01H3 Full Course Notes
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N when the same individual is responsible for related activities, the potential for errors and irregularities is increased. N when the responsibilities for ordering, receiving, and paying are assigned to different individuals, risk of abuses is much lower. N while it is management"s responsibility to establish and maintain systems of internal control, management relies on internal. N other control measures can include the following: conduct thorough background checks. Many believe that the most important and inexpensive measure any company can take to reduce employee theft and fraud is for the human resources department to conduct thorough background checks: bonding of employees who handle cash. Bonding means having insurance protection against theft of assets by dishonest employees. This is often referred to as fidelity insurance. Fidelity insurance contributes to the safeguarding of cash in two ways. First, the insurance company carefully screens all individuals before adding them to the policy and may reject risky applicants.

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