ACCT 200 Lecture 10 Outline of Last Lecture I Internal Controls II Fraud Triangle III Some objectives IV Sarbanes Oxley Act V Control Environment VI Controls of Cash Outline of Current Lecture I Terms II Separation of Duties III Reconciliations IV Homework 5 8 V Homework 5 10 VI Homework 5 12 VII Homework 5 13 VIII Homework 5 1 IX Homework 5 3 Current Lecture I Terms a Register tape this is recorded as sales revenue These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute II III IV V VI b Cash in register recorded as cash on balance sheet c Cash over recorded as other income d Cash short recorded as other expense Separation of Duties a This is the biggest takeaway for internal controls Just know that the reason for Segregation of Duties is to keep checks on employees handling money Bank Reconciliation a Bank reconciliation is to compare the bank s balance of cash to the book s balance of cash b Unadjusted balance is the cash balance per bank c Bank statement i Note receivable add to book ii Service charge subtract from book iii NSF bounced check subtract from book d Company Records i Outstanding checks subtract from bank ii Deposits in transit add to bank Homework 5 8 a Fraud involving senior management is very difficult to stop and would probably not be detected b Strong oversight of senior managers by auditing company also should allow somewhere for whistleblowers to make reports Homework 5 10 a No separation of duties this can be fixed by separating duties or by placing a camera to record employees actions Homework 5 12 a 27199 b 27228 c 29 should be recorded as miscellaneous expense d fire the employee or retrain them VII Homework 5 13 a 14356 b 14290 c 66 recorded as other income d Retrain him her VIII Homework 5 1 a Strength b Strength c Weakness a supervisor should perform the reconciliation d Strength e Strength f Weakness need segregation of duties g Weakness bank reconciliations should be done by someone not directly dealing with the cash IX Homework 5 3 a Subtract from bank b Add to bank c Subtract from bank d Add to book e Add to book f Subtract from book g Subtract from book Book Bank Cash per bank 40360 cash per book 30950 9275 4320 14300 990 450 1300 75 34885 34885
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