Lecture Accounting principles (11E): Chapter 8 - Coby Harmon

After completing this chapter you should be able to: Define fraud and internal control, identify the principles of internal control activities, explain the applications of internal control principles to cash receipts, describe the operation of a petty cash fund,...and other contents.
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Lecture Accounting principles (11E): Chapter 8 - Coby HarmonPrepared byCoby HarmonUniversity of California, Santa BarbaraWestmont College8-18Fraud, Internal Control,and CashLearning ObjectivesAfter studying this chapter, you should be able to:[1] Define fraud and internal control.[2] Identify the principles of internal control activities.[3] Explain the applications of internal control principles to cash receipts.[4] Explain the applications of internal control principles to cashdisbursements.[5] Describe the operation of a petty cash fund.[6] Indicate the control features of a bank account.[7] Prepare a bank reconciliation.[8] Explain the reporting of cash.8-2Preview of Chapter 8Accounting PrinciplesEleventh EditionWeygandt Kimmel Kieso8-3Fraud and Internal ControlFraudDishonest act by an employee that results in personal benefit tothe employee at a cost to the employer.Three factors thatcontribute tofraudulent activity.Illustration 8-18-4LO 1 Define fraud and internal control.Fraud and Internal ControlThe Sarbanes-Oxley ActRequired to maintain a system of internal control.Corporate executives and boards of directors must ensurethat these controls are reliable and effective.Independent outside auditors must attest to the adequacyof the internal control system.8-5Applies to publicly traded U.S. corporations.SOX created the Public Company Accounting OversightBoard (PCAOB).LO 1 Define fraud and internal control.