ACCT 2220 Chapter Notes - Chapter 7: Electronic Funds Transfer, Debit Card, Internal Control
28 Mar 2016
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Document Summary
Acct 2220 chapter 7 notes internal control and cash. Internal control consists of all the related methods and measures adopted within a company to help achieve reliable, inancial reporing. Used to prevent and detect errors which can lead to misstatements in the inancial statement. Control aciviies: authorizaion of transacions and aciviies- assignment of responsibility to employees. Only efecive when only one person is authorized to perform a speciic task. Can easily see who screwed up: segregaion of duies- responsibility for related aciviies should be assigned to diferent individuals. When the same individual is responsible for related aciviies, the potenial for errors increase. Employee cant commit fraud and cover it up too: documentaion- provide evidence that transacions and events have occurred at speciic imes with speciied amounts. Could be shipping documents like invoices with a signature added to idenify the individual responsible for the transacion. The use of prenumbered documents like receipts and cheques allow for control.
