MGT120H5 Chapter 4: INTERNAL CONTROL AND CASH

• School: UTM
• Department: Management
• Course: MGT120H5
• Professor: All

Document Summary

Lockbox system: a system of handling cash receipts by mail whereby customers remit payment directly to the bank, rather than through the entity"s mail system. Fraud: is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. Making false or misleading entries in the books of the company is known as cooking of the books. To engage in fraud is an act with economic, legal, and ethical implications. Fraud is usually is done for their own short-term economic gain, while others incur economic losses that may far outstrip the gains of the fraudsters. Fraud is illegal, those caught and found guilty of fraud ultimately face penalties that include imprisonment, fines, and monetary damages. Fraud violates the rights of many for the temporary betterment of a few, and for the ultimate betterment of no one. Explain the objectives and components of internal control.